Acquisitions / Dispositions

The Company’s acquisitions have been accounted for as business combinations. Net assets and results of operations are included in the Company’s consolidated financial statements commencing at the respective purchase closing dates. In connection with acquisitions, the Company records the estimated value of the net tangible assets purchased and the value of the identifiable intangible assets purchased, which typically consist of purchased customer lists, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. Until final valuations are complete, any change in assumptions could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.

The Risk and Insurance Services segment completed nine acquisitions during 2016.


•	February – Marsh & McLennan Agency ("MMA") acquired The Celedinas Agency, Inc., a Florida-based brokerage firm providing property and casualty and marine insurance as well as employee benefits services, and Aviation Solutions, LLC, a Missouri-based aviation risk advisor and insurance broker.


•	March – MMA acquired Corporate Consulting Services, Ltd., a New York-based insurance brokerage and human resource consulting firm.


•	August – MMA acquired Benefits Advisory Group LLC, an Atlanta-based employee benefits consulting firm.


•	September – MMA acquired Vero Insurance, Inc., a Florida-based agency specializing in private client insurance services.


•	November – MMA acquired Benefits Resource Group Agency, LLC, an Ohio-based benefits consulting firm and Presidio Benefits Group, Inc., a California-based employee benefits consulting firm.


•	December – Marsh acquired AD Corretora, a multi-line broker located in Brazil, and Bluefin Insurance Group, Ltd, a U.K.-based insurance brokerage.

The Consulting segment completed six acquisitions during 2016.


•	January – Mercer acquired The Positive Ageing Company Limited, a U.K.-based firm providing advice on issues surrounding the aging workforce.


•	April – Mercer acquired the Extratextual software system and related client contracts. Extratextual is a web based compliance system that helps clients manage and meet their compliance and risk management obligations.


•	December – Oliver Wyman acquired LShift Limited, a software development company, and Mercer acquired Sirota Consulting LLC, a global provider of employee benefit solutions; Pillar Administration, a superannuation provider located in Australia; and Thomsons Online Benefits, a U.K.-based global benefits software business.

Total purchase consideration for acquisitions made during 2016 was approximately $901 million, which consisted of cash paid of $865 million and deferred purchase and estimated contingent consideration of $36 million. Contingent consideration arrangements are based primarily on EBITDA and/or revenue targets over periods of two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. During 2016, the Company also paid $54 million of deferred purchase consideration and $86 million of contingent consideration related to acquisitions made in prior years.

The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed, based on their fair values:



(In millions)	2016
Cash	$	865
Estimated fair value of deferred/contingent consideration	36
Total consideration	$	901
Allocation of purchase price:
Cash and cash equivalents	$	52
Accounts receivable, net	49
Other current assets	8
Property, plant, and equipment	22
Other intangible assets	307
Goodwill	556
Other assets	18
Total assets acquired	1,012
Current liabilities	57
Other liabilities	54
Total liabilities assumed	111
Net assets acquired	$	901

Other intangible assets acquired are based on initial estimates and subject to change based on final valuations during the measurement period post acquisition date. The following chart provides information of other intangible assets acquired during 2016:

(a) Primarily non-compete agreements, trade names and developed technology

Prior Year Acquisitions

During 2015, the Risk and Insurance Services segment completed the following thirteen acquisitions:


•	January – Marsh acquired INGESEG S.A., an insurance brokerage located in Argentina.


•	May – Marsh acquired Sylvite Financial Services, Inc., a Canada-based insurance consulting firm and Sumitomo Life Insurance Agency America, Inc., an employee benefits brokerage and consulting firm providing employee benefit and other services to U.S.-based subsidiaries of Japanese companies.


•	June – MMA acquired MHBT, Inc., a Texas-based insurance broker and Marsh acquired SIS Co. Ltd., a Korea-based insurance broker and advisor.

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July – MMA acquired Vezina, a Canada-based independent insurance brokerage firm, Tequesta Insurance Advisors, an employee benefits insurance provider based in Florida, Cline Wood Agency, a Kansas City-based independent specialty insurance agency and J.W. Terrill, a Missouri-based independent insurance agency. Marsh acquired SMEI Group Ltd., a U.K.-based insurance broker providing specialist commercial insurance to small and medium-sized firms.


•	August – Marsh acquired Dovetail Insurance, a leading provider of insurance technology services to the U.S. small commercial market.


•	October – MMA acquired Dawson Insurance Agency, a North Dakota-based agency providing commercial and personal insurance, surety bonds, safety and loss control programs, and employee benefits services.


•	December – Marsh acquired Jelf Group, PLC, a U.K.-based insurance broking and financial consulting firm.

During 2015, the Consulting segment completed the following eight acquisitions:


•	February – Oliver Wyman acquired TeamSAI, a Georgia-based provider of consulting and technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.


•	June – Mercer acquired Kepler Associates, a U.K.-based executive remuneration specialist.


•	August – Oliver Wyman acquired the Hong Kong and Shanghai franchises of OC&C Strategy Consultants.


•	September – Mercer acquired Comptryx, a global pay and workforce metrics business specializing in the technology sector.


•	November – Mercer acquired HR Business Solutions (Asia) Limited, a Hong Kong-based compensation and employee benefits consulting firm, and Gama Consultores Associados Ltda, a Brazil-based retirement consulting firm.


•	December – Mercer acquired CPSG Partners, a Workday Services partner assisting clients worldwide to maximize the value of Workday Financial Management and Human Capital Management.

Total purchase consideration for acquisitions made during 2015 was $1.2 billion, which consisted of cash paid of $1.0 billion and deferred purchase and estimated contingent consideration of $176 million. Contingent consideration arrangements are primarily based on EBITDA and revenue targets over two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. During 2015, the Company also paid $36 million of deferred purchase consideration and $47 million of contingent consideration related to acquisitions made in prior years. In addition, the Company purchased other intangible assets in the amount of $2 million.

Subsequent Acquisition

On January 13, 2017, MMA entered into a definitive agreement to acquire J. Smith Lanier & Co. ("JSL"), one of the nation’s largest privately held insurance brokerage firms. The transaction is expected to close in the first quarter of 2017 pending customary approvals. JSL is a leading provider of insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S. Upon completion of the transaction, JSL will operate as MMA’s Southeast regional hub.

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during 2016, 2015 and 2014. In accordance with accounting guidance related to pro-forma disclosures, the information presented for current year acquisitions is as if they occurred on January 1, 2015 and reflects acquisitions made in 2015 as if they occurred on January 1, 2014. The pro-forma information adjusts for the effects of amortization of acquired intangibles. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results.



	Years Ended December 31,
(In millions, except per share data)	2016		2015		2014
Revenue	$	13,503	$	13,528	$	13,395
Income from continuing operations	$	1,792	$	1,643	$	1,475
Net income attributable to the Company	$	1,765	$	1,606	$	1,469
Basic net income per share:
– Continuing operations	$	3.40	$	3.02	$	2.65
– Net income attributable to the Company	$	3.40	$	3.02	$	2.69
Diluted net income per share:
– Continuing operations	$	3.37	$	2.99	$	2.61
– Net income attributable to the Company	$	3.37	$	2.99	$	2.66

The consolidated statement of income for 2016 includes approximately $25 million of revenue and $4 million of operating income related to acquisitions made during 2016. The consolidated statement of income for 2015 includes approximately $124 million of revenue and $7 million of operating income related to acquisitions made during 2015.

Acquisition-related expenses incurred in 2016 were $14 million.

Dispositions

In December 2015, Mercer sold its U.S. defined contribution recordkeeping business. The Company recognized pre-tax gains of $37 million in 2015 and $6 million in 2016 from this transaction, which are included in revenue in the consolidated statements of income in those years.

Weighted Average Amortization Period

Client relationships