JLT announces merger plans to create new operation Newstone...
JLT has entered an agreement under which SIACI, its 32% owned French associate, will combine with Assurances et Conseils Saint-Honoré (ACSH), the Paris-based employee benefit services provider and specialist insurance broker.
The agreement will see SIACI and ACSH continue to trade as separate operating subsidiaries of a newly formed holding company called Newstone Courtage.
Under the terms, JLT will become a 20% shareholder in Newstone and will receive net cash consideration of €21.4m. JLT will account for its investment in Newstone as an associate. JLT will also become a 70% shareholder in SIACI's businesses in Italy and Poland, and a 62% shareholder in SIACI's business in Spain. This will increase JLT's current interests in SIACI's Italian and Polish businesses from 30% and 50% respectively.
SIACI reported consolidated revenues in 2005 of €93.2m with profits before taxation of €22.9m. ACSH's revenues in the same period were €51.0m with profits before taxation of €3.8m. The contribution to JLT's profits after tax in 2005 from SIACI was £2.4m including Italy and Poland. Excluding the exceptional gain the transaction is not expected to have any appreciable impact on JLT's earnings per share in 2007.
Dominic Burke, JLT chief executive, said: “The combination of SIACI and ACSH creates a major new force in both insurance broking and employee benefits in France and for Europe as a whole. With Newstone as an associate of the JLT Group, we see significant opportunities to deepen our collaboration and provide a first class service to client companies around the world”.
