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Marsh & McLennan to Acquire McGriff, Boosts U.S. Market Presence

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Marsh & McLennan Companies, Inc.’s (MMC - Free Report) business, Marsh McLennan Agency (“MMA”), recently inked a deal to acquire McGriff Insurance Services, LLC for $7.75 billion in cash. The acquiree is a US-based provider of insurance broking and risk management services. Its revenues for the trailing 12 months ended June 30, 2024, amounted to $1.3 billion.

This move bodes well for MMC as it will enhance its position in the U.S. insurance market by enhancing its capabilities across commercial property and casualty, employee benefits, and personal lines. MMA accounted for nearly half of the Marsh US/Canada segment as of the second-quarter end. MMA completed three acquisitions in the second quarter of 2024. The purchase of McGriff will be funded through a combination of cash and debt financing. Marsh McLennan will also acquire a deferred tax asset estimated at around $500 million as part of the agreement.

This acquisition is expected to close by 2024-end, pending regulatory approvals. Acquisitions form one of the core growth strategies of Marsh & McLennan. Buyouts similar to the latest one add strength to its capabilities, expand service offerings and enable the company to enter new geographies, as well as solidify its foothold across existing markets. An upgraded services suite is likely to lure more customers and contribute more to the revenues of MMC in the days ahead.

In 2023, MMC completed 14 acquisitions. In the first half of 2024, it spent $716 million on nine acquisitions. This consistent acquisition activity poises the company well for long-term growth. MMC expects mid-single-digit or better-underlying revenue growth in 2024.

MMC’s Zacks Rank and Price Performance

MMC currently carries a Zacks Rank #2 (Buy).

Shares of Marsh & McLennan have gained 9.8% in the past six months compared with the industry’s 15.7% growth.

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Other Key Picks

Investors interested in the broader Finance space may look at some other top-ranked players like MGIC Investment Corporation (MTG - Free Report) , Jackson Financial Inc. (JXN - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While MGIC Investment currently sports a Zacks Rank #1 (Strong Buy), Jackson Financial and Arch Capital carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MGIC Investment’s current-year earnings indicates a 9.1% year-over-year increase. During the past 60 days, MTG has witnessed three upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues is pegged at $1.2 billion, indicating a 4.7% increase from a year ago.

The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $18.49 per share, which indicates 44% year-over-year growth. It witnessed two upward estimate revisions in the past 60 days against no downward movement. The consensus mark for JXN’s current-year revenues implies a 116.7% surge from a year ago.

The Zacks Consensus Estimate for Arch Capital’s 2024 earnings indicates 6.6% year-over-year growth. During the past 60 days, ACGL has witnessed six upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 28.9%.

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