Alexander Forbes to sell its brokerage business to Marsh
Alexander Forbes announced today that it has reached an agreement to sell its brokerage business to Marsh, a wholly-owned subsidiary of Marsh & McLennan Companies.
This business comprises Alexander Forbes Risk Services (AFRS) and certain local and correspondent operations serviced across sub-Saharan Africa, including Botswana and Namibia. The transaction which is subject to regulatory and other approvals, is targeted to complete in the fourth quarter of 2011.
Edward Kieswetter, Group Chief Executive of Alexander Forbes, said that the deal was consistent with Alexander Forbes’ growth strategy and would be mutually beneficial.
“Alexander Forbes will gain access to the expertise of the world’s leading international insurance broker, while Marsh will develop their African footprint through our on-the-ground expertise and extensive client relationships.”
Peter Zaffino, President and CEO of Marsh Inc., said: “Marsh recognises the tremendous potential of the African continent as a major market for insurance and risk management services. In Alexander Forbes Risk Services, we will acquire a highly regarded firm, greatly strengthening our immediate presence and providing us with a powerful platform to deliver value to the fast developing sub-Saharan region.”
Mr Kieswetter added that the transaction cleared the way for Alexander Forbes to focus on its growth strategy which is driven by the desire to enhance our Retail Strategy; pave the way for our Financial Services business in the rest of Africa; and expand our penetration into the Public Sector.
Kieswetter added that the spirit of the transaction is intended to leverage significant growth opportunities for both Alexander Forbes and Marsh.
The specific businesses being sold are Alexander Forbes Risk Services Corporate and Commercial, Alexander Forbes iConnect (Pty) Ltd and AF Compensation Technology Administration Services (Pty) Ltd (“AFRS”), and the Risk Services investments of Alexander Forbes AfriNet. AfriNet is the name and registered trade mark of Alexander Forbes' Network of Offices and Correspondents throughout Africa (excluding SA).
Jurie Erwee, current CEO of AFRS with global accountability for Africa (including South Africa) at Alexander Forbes, will be appointed CEO of the combined business in Africa, to be called Marsh Africa.
The combined operation will have principle offices in Johannesburg, Cape Town, Durban and Port Elizabeth as well as 12 other offices around South Africa.
Both Alexander Forbes and Marsh have, through focussed investment and support, achieved Level 3 status in terms of their respective B-BBEE scorecard ratings. A consortium of B-BBEE investors, which have been shareholders in Marsh’s SA’n operations in 2001, will retain their interest in the combined business.
Marsh, a wholly-owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), today announced that it has reached an agreement to acquire the brokerage business of Alexander Forbes (AF). This business comprises Alexander Forbes Risk Services (AFRS) and certain local and correspondent operations serviced across sub-Saharan Africa, including Botswana and Namibia. The transaction is subject to regulatory and other approvals.
Following completion of this transaction, which is targeted for the fourth quarter of 2011, Marsh will have taken a significant step forward in expanding its presence in Africa. In particular, it will have a leading market position in South Africa. The transaction combines Alexander Forbes’ well established South African operations, broader network and respected enterprise with Marsh’s global solutions, resources and placement capabilities to enhance Marsh’s competitive position in key markets.
Peter Zaffino, President and CEO of Marsh Inc., said: “Marsh recognizes the tremendous potential of the African continent as a major market for insurance and risk management services. In Alexander Forbes Risk Services we will acquire a highly regarded firm, greatly strengthening our immediate presence and providing us with a powerful platform to deliver value to the fast-developing sub-Saharan region.”
David Batchelor, CEO of Marsh’s Europe, Middle East and Africa region, said: “This transaction is positive news for our clients, colleagues and the risk and insurance industry across Africa. Our clients will benefit from the deep expertise brought together in the combined business; our colleagues will enjoy expanded career opportunities; and our global services and solutions will give greater options to companies of all sizes across the region.”
Jurie Erwee, CEO of AFRS, will be appointed CEO of the combined business in Africa, to be called Marsh Africa, and will report to Mr Batchelor. Brian Blake, CEO of Marsh South Africa, will be appointed Vice Chairman of Marsh Africa with specific responsibility for developing African business outside South Africa, and will report to Mr Erwee.
Mr Erwee said: “By aligning the local strengths of Alexander Forbes with Marsh’s global resources, we are bringing the world’s best to Africa. Marsh Africa will provide a broader offering to our clients and ensure that we can provide them with the risk solutions best suited to their needs. Both Alexander Forbes and Marsh have, through focused investment and support, achieved Level 3 status in our respective Broad-Based Black Economic Empowerment (B-BBEE) scorecard ratings. As a combined enterprise we are committed to continuous improvement in our BEE performance levels.”
A consortium of B-BBEE investors, which have been shareholders in Marsh‘s South African operations since 2001, will retain their interest in the combined business. Commenting on their behalf, Sam Montsi, a Non Executive Director of Marsh Pty Ltd, said: ”Marsh has a sustained and strong commitment to the Black Economic Empowerment process and this will continue to be a cornerstone of Marsh’s future development.”
Dan Glaser, Group President and Chief Operating Officer of Marsh & McLennan Companies said: “Africa is a region of increasing growth opportunities and focus for Marsh & McLennan Companies. We are delighted to welcome Alexander Forbes’ respected management team and colleagues who have a well-deserved reputation for excellent client relationships. Together, we will bring the best of Marsh & McLennan Companies’ global capabilities to their impressive range of clients, which includes some of South Africa’s most prominent industrial, commercial and public organisations.”
