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Expanding its operations in Africa, Marsh & McLennan Companies Inc.’s (MMC - Analyst Report) leading Consulting wing – Mercer – announced the purchase of the leading information provider of compensation and benefits survey data and rewards – Global Remuneration Solutions Ltd. (GRS). However, the value and other details of the deal remain undisclosed.

Based out of South Africa, GRS collects the summaries of the compensation and benefits from 36 sub-Saharan African countries. The firm offers its specialized services to clients from various sectors, across domestic and large multinational companies in Africa.

Meanwhile, this is not the first time that Marsh & McLennanhas associated itself with GRS via Mercer. The strategic partnership between Mercer and GRS dates back to 1999.

The present merger follows the healthy working relationship established when both the firms together launched a forum in 2007, to expand GRS’ presence in the emerging markets of the Middle East and Africa. GRS offers a wide array of consultations and well-informed market data on developing an effective model on human resources and compensation practices for smooth operations in various local and international enterprises.

On the other hand, the deal blends well with Mercer’s scale and utility of operations. While the pension benefits and healthcare are witnessing a shift from the public to the private sector in Africa, it is also opening up sizeable growth opportunities within Mercer’s pensions, health and benefits, investment and talent consulting segments. The acquisition will also add to Mercer’s client base.

The deal also complements Marsh & McLennan’s strategy of expansion into potentially strong markets through mergers and acquisitions.We believe such opportunistic deals not only exhibit prudent management and future earnings potential, these also enhance the company’s competitive edge and global market position. Overall, Marsh & McLennan has a history of outperforming its peers, banking on its size, diverse product offering and technical skill.

While Marsh & McLennan carries a Zacks Rank #3 (Hold), other potential performers in the financial services industry include HCI Group Inc. (HCI - Snapshot Report), State Auto Financial Corp. (STFC - Snapshot Report) and Global Indemnity Plc (GBLI). All these stocks carry a Zacks Rank #1 (Strong Buy).

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