Moving ahead with its inorganic growth strategy,
Marsh & McLennan Companies Inc.
) leading insurance brokerage wing - Marsh Inc. - announced its
intention to acquire a major stake in Panama-based Seguros Morrice
y Urrutia SA (Semusa). While the value and terms of the deal remain
undisclosed, the transaction is scheduled to culminate by Sep
Armed with more than $2.8 million of assets and a clientele of
over 75,000, Semusa is a leading insurance brokerage service firm
with a strong foothold in Central America and the Caribbean.
Expansion in these regions also backed Marsh's decision to acquire
Franco & Acra Tecniseguros in the Dominican Republic in Jun
The intention to buy a majority stake in Semusa stems from its
time-honored alliance with Marsh, whereby the former continues to
be Marsh's franchise broker since 1999. Post-acquisition, Semusa
will operate under Marsh's brand name.
Gaining Scale from Acquisitions
The deal complements Marsh & McLennan's strategy of
expansion into potentially strong markets through mergers and
acquisitions. Moreover, Panama is among the rapidly growing
economies and lays ample growth opportunities for Marsh &
McLennan. Additionally, Semusa will bring a strong management team
and about 196 professionals with a comprehensive understanding of
the local market. This will be an added advantage for Marsh.
The largest insurance brokerage player by market value, Marsh
& McLennan has been gaining a strong competitive edge withthe
spree of acquisitions executed over the past years. About 45
acquisitions in the insurance brokerage space since Nov 2009 have
enhanced Marsh's scale and size of business, thereby substantially
contributing to its top line.
Though increased international dependence exposes the company to
currency volatility, Marsh & McLennan has a history of
outperforming peers given its size, extensive product offering,
global presence and technical expertise.
Marsh & McLennan carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same sector include
Platinum Underwriters Holdings Ltd.
Erie Indemnity Co.
), all of which have a Zacks Rank #2 (Buy).
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