Gallagher to acquire JLT aerospace insurance business for £190m

Insurance acquisition news : Arthur J. Gallagher & Co. (Gallagher) has signed a deal worth around £190 million to acquire the global aerospace insurance broking business of Jardine Lloyd Thompson Group (JLT).

For JLT, the sale of the aerospace insurance broking business is to get the European Commission approval for its $5.6 billion acquisition by Marsh & McLennan Companies (MMC), which was announced in September 2018. Check out report on MMC acquisition of JLT here.

By selling the aerospace insurance business, MMC is said to address competition concerns in the sector as raised in the ongoing phase one review of its pending acquisition of JLT.

As per the agreement, Gallagher will acquire all of the assets of JLT’s global aerospace retail and wholesale insurance broking division. Included in these are operations of the aerospace insurance business in the UK, US, Canada, Australia, New Zealand in addition to 10 other countries across Europe, Latin America and Asia.

Gallagher will also acquire the assets of Hayward Aviation, which is part of the divested JLT business, and is a UK insurance broker that deals in providing aviation insurance for high-net-worth individuals and smaller airlines.

The divested aerospace insurance business of JLT earned about £65 million in 2018.

Gallagher to acquire JLT aerospace insurance business. Photo courtesy of Gallagher.

As part of the deal, nearly 250 employees from the JLT aerospace insurance broking business will join Gallagher. Out of these, around 100 employees of JLT’s London Market operations will become part of Gallagher’s existing aviation insurance division, which in December 2018 acquired UK-based aviation insurance and reinsurance broker Boston Marks Insurance Brokers.

J. Patrick Gallagher, Jr.- Chairman, President and CEO of Gallagher said: “The addition of JLT’s global aerospace broking operations will firmly position Gallagher as a leading broker in the extremely attractive and dynamic aviation and aerospace sector.

“The business portfolio is a highly complementary geographic fit with Gallagher’s existing footprint and will provide significant growth opportunities for our international businesses. We look forward to welcoming the team to Gallagher later this spring.”

The closing of the transaction is contingent upon the closing of the MMC acquisition of JLT apart from securing customary regulatory approvals.

MMC confirmed that apart from the JLT aerospace insurance business, there are no discussions with the European Commission pertaining to any other aspect of the combined MMC-JLT business. Depending on remaining regulatory and UK High Court approvals, the closing of the deal continues to be on track for the spring of 2019, said MMC.