Focusing on growth through acquisitions,
Marsh & McLennan Companies Inc.
) leading insurance brokerage wing - Marsh Inc. - announced its
intention to purchase a leading Peru-based insurance advisor -
Rehder y Asociados Group (Rehder).
The transaction is expected to culminate by the end of Jun
2013. The acquisition includes both the insurance operations of
Rehder and the employee health benefits operations of
Humanasalud. Other terms and financial consideration of the deal
Further, the acquisition complements Marsh & McLennan's
strategy of expansion into global emerging economies. Armed with
annual revenue of over $30 million, Rehder's excellent risk
management capacities and superior market position in Peru will
broaden Marsh & McLennan's product offerings in South
America, thereby laying down scope for enhanced growth for the
company. The latest acquisition is yet another attempt by the
company to enhance its manpower resources in order to expand its
Moreover, the acquisition will help Marsh & McLennan
penetrate the Peru insurance market, wherein Rehder enjoys a
strong client base as it has been covering about 17% of this
market for over 8 years now. Through such acquisitions, Marsh has
expanded its operations in over 100 countries globally.
Marsh & McLennan's focus on boosting inorganic growth is
well aligned with its emphasis on generating positive financial
results and expanding margins. Moreover, a healthy balance-sheet
and adequate liquidity eliminates any significant risk from the
company's financial leverage. This is because Marsh &
McLennan keeps its capital requirements at low levels despite
While increased international dependence exposes the company
to currency volatility, Marsh & McLennan has a history of
outperforming its peers banking on its size, diverse product
offering, global presence and technical expertise. We believe
that the company has the ability to remain focused on this growth
approach with a prudent management, thereby driving the earnings
in the future as well.
While Marsh & McLennan carries a Zacks #3 Rank (Hold),
other outperformers in the financial services industry include
Validus Holdings Ltd.
CBOE Holdings Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
CBOE HOLDINGS (CBOE): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
VALIDUS HOLDING (VR): Free Stock Analysis
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