Back to top

Image: Bigstock

Marsh & McLennan (MMC) to Enhance Wealth Unit With Acquisition

Read MoreHide Full Article

Marsh & McLennan Companies, Inc.’s (MMC - Free Report) business, Mercer, recently inked a deal to acquire Cardano, a long-term savings specialist operating mainly in the UK and the Netherlands. The acquiree provides investment advisory, fiduciary management services, derivatives and investing solutions for defined contribution and defined benefit pension plans. Cardano’s assets under management are worth $66 billion as of Dec 31, 2023.

This move bodes well for MMC, as it will enhance its offerings in the Wealth business. This business grew 5% year over year in the first quarter of 2024 on an underlying basis. The addition of Cardano will complement specialist investment capabilities under MMC’s umbrella, helping it to serve its institutional investors and pension clients better.

Moreover, this acquisition will position MMC as the leading pension provider in the Netherlands and the UK. MMC will become well poised to expand its offerings to serve large asset owners like family offices, insurers, foundations and endowments.

This acquisition is expected to close by 2024-end, pending regulatory approvals. Terms of the transaction are not disclosed yet. Acquisitions form one of the core growth strategies of Marsh & McLennan, and buyouts similar to the latest one add strength to its capabilities, expand services offerings and enable the company to enter new geographies as well as solidify its foothold across existing markets. An upgraded services suite is likely to lure more customers and contribute more to the revenues of MMC in the days ahead.

In 2023, MMC completed 14 acquisitions. In the first quarter of 2024, the company further invested $347 million in six acquisitions. This consistent acquisition activity poises the company well for long-term growth.

Shares of Marsh & McLennan have gained 3.9% in the past six months compared with the industry’s 1.2% growth. MMC currently carries a Zacks Rank #3 (Hold).

Zacks Investment Research
Image Source: Zacks Investment Research

Key Picks

Some better-ranked stocks in the broader Finance space are Ambac Financial Group, Inc. (AMBC - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Root, Inc. (ROOT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Ambac Financial’s current-year earnings is pegged at $1.45 per share, which witnessed one upward estimate revision in the past month against no movement in the opposite direction. AMBC beat earnings estimates in all the past four quarters, with an average surprise of 893.5%.

The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $3.61 per share, which indicates 28.5% year-over-year growth. It has witnessed one upward estimate revision against none in the opposite direction during the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.9%.

The consensus mark for ROOT’s current-year earnings indicates a 53% year-over-year improvement. It beat earnings estimates in all the past four quarters, with an average surprise of 34.1%. Furthermore, the consensus estimate for Root’s 2024 revenues suggests 125.3% year-over-year growth.

Published in