MHM.L Regulatory News (MHM)

1 Feb 2007 11:00

Marsh & McLennan Co Inc01 February 2007 News Release Media Contact: Investor Contact: Rich Myers Mike Bischoff Edelman for MMC MMC 212 819 4807 212 345 5470 MMC ANNOUNCES THAT GREAT-WEST LIFECO INC. HAS SIGNED A DEFINITIVE AGREEMENT TO PURCHASE PUTNAM INVESTMENTS FOR $3.9 BILLION NEW YORK, NY, February 1, 2007-Marsh & McLennan Companies, Inc. (MMC) announcedtoday that Great-West Lifeco Inc., a financial services holding companycontrolled by Canada-based Power Financial Corporation, has signed a definitiveagreement to purchase Putnam Investments. The sale price is $3.9 billion incash, subject to certain customary adjustments. Putnam is one of the largestinvestment management firms in the United States, with $192 billion undermanagement at the end of 2006. The transaction has been approved by the respective boards of directors of MMCand Great-West Lifeco, and is expected to close in the middle of this year,subject to regulatory approval, required client consents, and other customaryconditions. Michael G. Cherkasky, MMC's president and chief executive officer, said, "Thisis an important transaction for MMC and its shareholders. We will receive anattractive price for Putnam, strengthen our ability to focus on our corebusinesses, and significantly enhance our financial flexibility. Selling Putnamis another important step in enhancing long-term shareholder value and drivingadditional success in our risk and human capital businesses. "The proceeds to MMC from this sale, combined with our strong cash flow, willgive us the flexibility to consider a number of desirable options to furtherstrengthen our company such as investing in our business, stock repurchases, anddebt reduction." The impact of the sale on MMC's earnings per share cannot be preciselycalculated prior to the close of the transaction due to a number of variables,such as the closing date and the ultimate use of the cash proceeds. Assumingthe transaction closes as expected in mid-year, MMC estimates that the salewould have a mildly dilutive impact on 2007 earnings per share of approximatelyfive cents. Cherkasky concluded, "The sale of Putnam will enable MMC to focus onstrengthening the global leadership positions of our market-leading risk andhuman capital businesses. We are very positive about our future and believe thesuccessful completion of this transaction will aid in driving our growth andmeeting our commitments to our shareholders, clients, and employees." Goldman, Sachs & Co. and Merrill Lynch & Co. acted as MMC's financial advisorsfor the transaction. Davis Polk & Wardwell acted as MMC's legal counsel. MMC is a global professional services firm with annual revenues of approximately$12 billion. It is the parent company of Marsh, the world's leading risk andinsurance services firm; Guy Carpenter, the world's leading risk and reinsurancespecialist; Kroll, the world's leading risk consulting company; Mercer, a majorglobal provider of human resource and specialty consulting services; and PutnamInvestments, one of the largest investment management companies in the UnitedStates. Approximately 55,000 employees provide analysis, advice, andtransactional capabilities to clients in over 100 countries. Its stock (tickersymbol: MMC) is listed on the New York, Chicago, and London stock exchanges.MMC's website address is www.mmc.com. Putnam Investments, with approximately 3,000 employees, is a global moneymanagement firm with over 68 years of investment experience, $192 billion inassets under management, over 200 institutional clients, and over 9 millionshareholders and retirement plan participants. ### Conference Call A conference call to discuss the sale will be held today at 9:00 a.m. EasternTime. To participate in the teleconference, please dial (800) 862-9098 or (785)424-1051 (international). The access code for both numbers is 3437308. The liveaudio webcast may be accessed at www.mmc.com. A replay of the webcast will beavailable approximately two hours after the event at the same web address. This press release contains "forward-looking statements," as defined in thePrivate Securities Litigation Reform Act of 1995. These statements, whichexpress management's current views or assumptions concerning future events orresults, use words like "anticipate," "assume," "believe," "continue,""estimate," "expect," "intend," "plan," "project" and similar terms, and futureor conditional tense verbs like "could," "should," "will" and "would." Forexample, we may use forward-looking statements when addressing topics such as:future actions by our management or regulators; the outcome of contingencies;changes in our business strategy; changes in our business practices and methodsof generating revenue; the development and performance of our services andproducts; market and industry conditions, including competitive and pricingtrends; changes in the composition or level of MMC's revenues; our coststructure; the impact of acquisitions and dispositions; and MMC's cash flow andliquidity. Forward-looking statements are subject to inherent risks and uncertainties.MMC's agreement to sell Putnam is subject to a number of closing conditions,some of which are outside of MMC's control, and there can be no assurance thatthe transaction will close as planned or that the announced sale price will notbe adjusted pursuant to the terms of the sale agreement. In addition, factorsthat could cause MMC's actual results to differ materially from those expressedor implied in our forward-looking statements include: • Putnam's performance between now and the closing of the announced salelater in 2007; • our ability to effectively deploy MMC's proceeds from the sale ofPutnam; • our estimate of the dilutive impact of the sale of Putnam on MMC'sfuture earnings per share is necessarily based on a set of current managementassumptions, including assumptions about MMC's use of sale proceeds and theoperating results of Putnam and MMC's other subsidiaries; • the economic and reputational impact of: litigation and regulatoryproceedings brought by federal and state regulators and law enforcementauthorities concerning our insurance and reinsurance brokerage and investmentmanagement operations (including the complaints relating to market serviceagreements and other matters filed by, respectively, the New York AttorneyGeneral's office in October 2004, the Connecticut Attorney General's office inJanuary 2005 and the Florida Attorney General's office and Department ofFinancial Services in March 2006, and proceedings relating to market-timingmatters at Putnam); and class actions, derivative actions and individual suitsfiled by policyholders and shareholders in connection with the foregoing; • in light of Marsh's elimination of contingent commission arrangements inlate 2004, our ability to achieve profitable revenue growth in our risk andinsurance services segment by providing both traditional insurance brokerageservices and additional risk advisory services; • our ability to retain existing clients and attract new business,particularly in our risk and insurance services segment, and our ability toretain key employees; • period-to-period revenue fluctuations in risk and insurance servicesrelating to the net effect of new and lost business production and the timing ofpolicy inception dates; • the impact on risk and insurance services commission revenues of changesin the availability of, and the premiums insurance carriers charge for,insurance and reinsurance products, including the impact on premium rates andmarket capacity attributable to catastrophic events such as hurricanes; • the impact on renewals in our risk and insurance services segment ofpricing trends in particular insurance markets, fluctuations in the generallevel of economic activity and decisions by insureds with respect to the levelof risk they will self-insure; • the impact on our consulting segment of pricing trends and utilizationrates; • our ability to implement our restructuring initiatives and otherwisereduce or control expenses and achieve operating efficiencies; • the impact of competition, including with respect to pricing and theemergence of new competitors; • the impact of increasing focus by regulators, clients and others onpotential conflicts of interest, particularly in connection with the provisionof consulting and investment advisory services; • fluctuations in the value of Risk Capital Holdings' investments inindividual companies and investment funds; • our ability to make strategic acquisitions and dispositions and tointegrate, and realize expected synergies, savings or strategic benefits from,the businesses we acquire; • our exposure to potential liabilities arising from errors and omissionsclaims against us; • our ability to meet our financing needs by generating cash fromoperations and accessing external financing sources, including the potentialimpact of rating agency actions on our cost of financing or ability to borrow; • the impact on our operating results of foreign exchange fluctuations;and • changes in the tax or accounting treatment of our operations, and theimpact of other legislation and regulation in the jurisdictions in which weoperate, particularly given the global scope of our businesses. The factors identified above are not exhaustive. MMC and its subsidiariesoperate in a dynamic business environment in which new risks may emergefrequently. Accordingly, MMC cautions readers not to place undue reliance onits forward-looking statements, which speak only as of the dates on which theyare made. MMC undertakes no obligation to update or revise any forward-looking statementto reflect events or circumstances arising after the date on which it is made.Further information concerning MMC and its businesses, including informationabout factors that could materially affect our results of operations andfinancial condition, is contained in MMC's filings with the Securities andExchange Commission. MMC and its operating companies use their websites to convey meaningfulinformation about their businesses, including the anticipated release ofquarterly financial results and the posting of updates of assets undermanagement at Putnam. Monthly updates of total assets under management atPutnam will be posted to the MMC website the first business day following theend of each month. Putnam posts mutual fund and performance data to its websiteregularly. Assets for most Putnam retail mutual funds are posted approximatelytwo weeks after each month-end. Mutual fund net asset value (NAV) is posteddaily. Historical performance and Lipper rankings are also provided. Investorscan link to MMC and its operating company websites through www.mmc.com. This information is provided by RNS The company news service from the London Stock Exchange