It has been just over one month since Marsh & McLennan Companies, the name behind brokerage giant Marsh, completed its $5.6 billion acquisition of Jardine Lloyd Thompson Group plc (JLT). April 01, 2019 will be remembered as the day that two brokerage juggernauts became one. It’s the equivalent of celebrity super couple Brad Pitt and Angelina Jolie finally becoming Brangelina in 2005 … just without the pop culture portmanteau.
The mega merger was first announced in September 2018 – and as huge corporate combinations go, the transition has been reasonably smooth so far, according to Martin South, president US and Canada, Marsh, and Pat Donnelly, Marsh JLT specialty leader, US and Canada.
Addressing media at the RIMS Annual Conference in Boston, South commented: “This is not going to be a steamroller merger at all. We’ve had a lot of calls from clients saying: ‘We’re delighted with the transaction, but please keep my team the same.’ We’re taking that on board. We’ve been going through this process very thoughtfully … it’s going to be team by team and person by person, getting people settled into their roles.
“It’s about getting the best people in our organizations into the best roles. It’s also getting the best practices wherever they are - it could have been at Marsh, it could have been at JLT, and it could be a new way that we work out together. We really want to get those synergies from the deal. It’s really about weaving [JLT’s] DNA into ours as thoughtfully as we can – and ensuring employees are settled, engaged and comfortable.”
As the largest insurance broker in the world, Marsh advises around 95% of Fortune 1000 companies. The firm announced that its acquisition of JLT has significantly expanded its presence in the middle market and small commercial sectors, while also bringing an influx of around 10,000 talented individuals.
Of course, when companies merge on such a grand scale, it’s only natural that there will be some duplication of roles leading to potential redundancies. When the merger was first announced in September last year, it was suggested that overlap between the two brokerages could lead to around 3,750 job losses, especially in function areas like IT, HR, operations, legal and administrative support staff, and so on. That naturally caused some staff anxiety, especially within JLT, about the merger, but as familiar players in the M&A space, both leadership teams are addressing these issues effectively, according to Donnelly.
“One of the things that’s really comforting for our people and our teams [at JLT] in getting through that initial period of uncertainty is … the Marsh leadership team is up for business and it knows the business well. That level of credibility and the respect our people have for people and leaders who have built businesses like they have [at Marsh] – that’s really important,” he said. “From our perspective, Marsh is pretty seasoned on executing in acquisitions and integration. JLT didn’t do as many but we did have a very deliberate process.
“From both sides, I think we appreciate how to make something like this work. We’ve got an integration team in place that’s very experienced, and the integration committees and the work streams have representation from both firms. If your aspiration is to reach the best of both, the first step is having both sides represented in a discussion, really listening to each other, and being open to hearing about another way or a different way. We’re going through that process now.”
Both South and Donnelly were in agreement that Marsh and JLT “have a lot more in common than [they] have differences. At the RIMS media briefing, the two execs sang each other’s praises after finding themselves “in simpatico” on so many issues. In South’s words, it’s “a bit like a bromance.” He added that Donnelly’s past experience building JLT up in the US, as well as leading teams at larger organizations like Aon and Accenture, means he understands how the larger models work and has “been very sympathetic for us to work together.”
Donnelly commented: “We’ve come to learn that we have a lot more in common than we have differences. We share a passion for colleagues and clients. I think specific to Martin … he has a healthy paranoia, not only about how he runs the business but also about the issues of the day. [For example] issues of diversity and inclusion are so important to him – he’s really leading that at Marsh. That has made this transition a lot easier for our colleagues as the leadership team has gotten around to meet our people, spend time in town halls and one-on-one meetings. That all alleviates some of that initial uncertainty that we had.”