Broking and advisory giant Marsh & McLennan Companies, Inc. (MMC) has outlined plans to issue $5 billion of senior debt to fund its previously announced $5.6 billion acquisition of Jardine Lloyd Thompson Group (JLT).
The offering consists of six tranches of senior notes with maturities of up to 30 years.
MMC stated that the pricing of the notes includes $700 million aggregate principal amount of its 3.500% senior notes due 2020, $1 billion aggregate principal amount of its 3.875% senior notes due 2024, and $1.25 billion aggregate principal amount of its 4.375% senior notes due 2029.
It also includes $500 million aggregate principal amount of MMC’s 4.750% senior notes due 2039, $1.25 billion aggregate principal amount of its 4.900% senior notes due 2049, and $300 million aggregate principal amount of its floating rate senior notes due 2021.
MMC explained that it intends to use the net proceeds from the senior notes offering to fund, in part, the acquisition of JLT, including the payment of related fees and expenses, and to repay certain JLT indebtedness, as well as for general corporate purposes.
The acquisition, which was first announced in September 2018, promises holders of JLT’s common shares a cash consideration of £19.15 per share, equating to an estimation enterprise value of $6.4 billion.
MMC said at the time that it planned to fund the deal using a combination of cash on hand and proceeds from debt financing.
JLT shareholders approved the transaction with 99.9% in favour and MMC was later granted an early termination of the waiting period required for its completion.
The company now expects the acquisition to be completed some time in the spring of 2019, subject to certain customary conditions.
It added that the closing of the notes offering is not contingent on the completion of the acquisition deal and is expected to occur on January 15, 2019.
Goldman Sachs & Co, Citigroup Global Markets, Deutsche Bank Securities, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, HSBC Securities (USA), J.P. Morgan Securities, MUFG Securities Americas, RBC Capital Markets, U.S. Bancorp Investments, and Wells Fargo Securities are acting as joint book-running managers for the notes offering.
Additionally, ANZ Securities, BNP Paribas Securities, Drexel Hamilton, GC Securities, a division of MMC Securities, PNC Capital Markets, Scotia Capital (USA), TD Securities (USA), and The Williams Capital Group are acting as co-managers for the notes offering.