Marsh McLennan will acquire McGriff Insurance in a $7.8 billion deal

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(Bloomberg) –Marsh McLennan has agreed to buy smaller rival McGriff Insurance Services in a $7.8 billion all-cash deal, marking its biggest deal ever.

The New York-based brokerage aims to close the deal by the end of the year, it said in a statement on Monday. McGriff, a subsidiary of TIH Insurance, posted revenue of $1.3 billion in the 12 months ending June 2024.

The acquisition will enhance Marsh’s property and casualty, management liability, employee benefits and personal businesses, Marsh said in the statement.

“The firm will be an important addition to the business we have built over 15 years,” said David Eslick, chairman and chief executive of the Marsh McLennan agency, the unit through which the deal was closed.

The $7.8 billion is the most the company has ever spent on an acquisition, according to Bloomberg data. It’s also more than the $4.5 billion that Marsh — which has grown by acquiring smaller agencies over the years — previously allocated for dividends, acquisitions and share buybacks in 2024.

Marsh will finance the deal through a combination of cash and debt financing, and with the acquisition will assume a deferred tax asset of approximately $500 million.