Up to £100 million (around NZ$197 million) – that’s the amount to be allocated to Jardine Lloyd Thompson Group (JLT) bosses and employees as part of the takeover deal with Marsh & McLennan Companies (MMC).
“Given the critical importance of its senior management and staff to its business and continued success, JLT put in place broad-based retention and reward arrangements across the JLT Group to be implemented in the event of a possible transaction,” read the Rule 2.7 announcement published by the two firms.
They said the amount will be payable on or shortly following the closing of the acquisition, which values the entire issued and to be issued share capital of JLT at approximately £4.3 billion (around NZ$8.5 billion) on a fully diluted basis. The consideration implies an enterprise value of approximately £4.9 billion (around NZ$9.69 billion).
Major shareholder JMH Investments Limited (JMH), which has more than a 40% shareholding in the British insurance brokerage, has committed to financially support the retention and reward arrangements by making a cash payment to JLT of £50 million (around NZ$98.9 million).
“MMC acknowledges that, for the purpose of protecting the business to be acquired pursuant to the scheme, JLT has agreed to make cash retention awards to employees whose retention is considered critical for the business up to a maximum in aggregate of £75 million (around NZ$148.3 million), such awards being funded in part by JMH,” stated the co-operation agreement seen by Insurance Business.
It continued: “MMC acknowledges that JLT may make cash awards to employees in recognition of value creation, length of service, and/or seniority of those individuals up to a maximum in aggregate of £25 million (around NZ$49.4 million), such awards being funded by JMH.”
The “scheme” refers to a scheme of arrangement under Part 26 of the Companies Act.
JLT will be an addition to the US-headquartered buyer’s Marsh, Guy Carpenter, Mercer, and Oliver Wyman units.