£5bn insurance deal to trigger £100m payday

HIGH flyers at insurance broker Jardine Lloyds Thompson will rake in £100m after it was bought by a US rival for nearly £5bn.

The Lloyd’s of London stalwart accepted a takeover offer from Marsh & McLennan (MMC) worth 1915p a share, or £4.9bn.

JLT shares soared almost 31pc, or 440p, to 1872p.

MMC, which is worth more than £42bn, has pledged to pay £100m in retention bonuses to some senior management and staff.

But the bumper deal could also see almost 4,000 staff axed.

MMC admitted that as many as 5pc – equivalent to 3,750 – of staff would lose their jobs across the two businesses following the tie-up.

It is not clear where jobs will be lost but JLT employs 4,000 of its 10,000 workers in the UK, where its main operations are located.

Job cuts are expected to affect staff in divisions such as finance, human resources, IT, operations, legal and administration.

JLT chief executive Dominic Burke, who has led the company for 13 years, said: ‘This is an emotional day for me and for everyone at JLT.’

But he added: ‘The entrepreneurial spirit that defines JLT will continue to prosper.’

JLT was founded in 1997 through the merger of Jardine Insurance Brokers, which was formed almost 50 years ago, with Lloyd Thompson Group. MMC, which was founded in 1905, employs 65,000 staff with clients in more than 130 countries.

The merged group is expected to make revenues of £13.7bn a year. Burke will join MMC as vice chairman and sit on the group’s executive committee. The takeover is expected to complete in spring next year. Burke denied JLT was plotting to sell the business before it was approached by MMC, saying formal talks began earlier this month.

‘We were not looking to sell, we were approached by MMC and it was a compelling offer,’ Burke said.

‘We saw it as opportunity rather than threat.’

Barrie Cornes, analyst at Panmure Gordon, said the offer was ‘fabulous for JLT shareholders’.

He added that Burke ‘deserves the plaudits’.

MMC plans to keep its headquarters in New York but will have ‘a larger presence in London and the UK more broadly’.

Around 50pc of MMC’s business comes from the US. Dan Glaser, president and chief executive of MMC, said the tie-up ‘will create a platform to deliver exceptional service to clients’ adding: ‘At a personal level, I have come to know, and respect, Dominic Burke and his management team from my time both at MMC and as an underwriter.

‘I am confident that the addition of JLT’s talented colleagues will make us an even stronger and more dynamic company.’