BGC Partners to sell insurance brokerage business to Ardonagh for $500m

BGC Partners, a US-based brokerage and financial technology company, has agreed to divest its insurance brokerage business to The Ardonagh Group, a UK-based insurance distribution platform, for $500 million in cash.

The insurance brokerage business had contributed revenue of nearly $191 million to BGC Partners during the 12-month period ending 31 March 2021.

It comprises Ed Broking Group and Besso Insurance, which were grouped recently together under the brand of Corant Global. The businesses are made up of global wholesale and specialty (re)insurance broker Ed, Lloyd’s broker – Besso, German marine broker – Junge, aviation specialist firm – Piiq Risk Partners, UK-based MGA -Globe Underwriting, Australian MGA – Epsilon Underwriting, and European MGA – Cooper Gay.

Nearly 900 people are working across each of the insurance brands.

BGC Partners to divest its insurance brokerage business to Ardonagh Group in $500m deal. Photo courtesy of Tumisu from Pixabay.

BGC Partners plans to use the proceeds from the transaction to invest in its Fenics business, to repurchase its own shares and/or units, and also for general corporate purposes.

Howard W. Lutnick – Chairman and CEO of BGC Partners said: “The agreement to sell our Insurance Brokerage business for $500 million reflects the significant value we have created since entering this market in 2017. Like our previous sales of eSpeed and Trayport, as well as our IPO and tax-free spin-off of Newmark, this sale further demonstrates our commitment to driving shareholder value.”

Ardonagh Group intends to house Ed Broking Group and Besso Insurance within its specialty segment, which presently is made up of Price Forbes, Compass London Markets, and Bishopsgate.

David Ross – Ardonagh Group CEO said: “We’re delighted to welcome each of BGC’s insurance brokerage businesses to our Ardonagh Specialty platform. This is a compelling shakeup of the global wholesale landscape, bringing two of the last remaining independent outfits of scale together to create the largest privately owned specialty broker in London, safeguarding choice for both clients and employees.

“A backdrop of unprecedented levels of consolidation has created a vacuum in the market, a space from which the BGC and Ardonagh businesses will emerge together as a preeminent force, restoring balance and cultivating a preferred destination for top-performing talent.”

The closing of the deal is subject to regulatory approval.