Acquisitions

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, developed technology, 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 assests.

The Risk and Insurance Services segment completed four acquisitions during the first three months of 2017.


•	January – Marsh & McLennan Agency ("MMA") acquired J. Smith Lanier & Co. ("JSL"), one of the nation’s largest privately held insurance brokerage firms providing insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S.


•	February – MMA acquired iaConsulting Services, a Texas-based employee benefits consulting firm.


•	March – MMA acquired Blakestad, Inc., a Minnesota-based private client and commercial lines insurance agency, and RJF Financial Services, a Minnesota-based retirement advisory firm.

Total purchase consideration for acquisitions made during the first three months of 2017 was $509 million, which consisted of cash paid of $419 million and deferred purchase and estimated contingent consideration of $90 million. Contingent consideration arrangements are based primarily on earnings before interest, tax, depreciation and amortization ("EBITDA") or revenue targets over a period of two to four years. The fair value of the contingent consideration was based on projected revenue and EBITDA of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. The Company also paid $26 million of deferred purchase consideration and $12 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 during 2017 based on their fair values:



For the Three Months Ended March 31, 2017
(In millions)
Cash	$	419
Estimated fair value of deferred/contingent consideration	90
Total Consideration	$	509
Allocation of purchase price:
Cash and cash equivalents	$	8
Accounts receivable, net	7
Property, plant, and equipment	3
Other intangible assets	204
Goodwill	363
Total assets acquired	585
Current liabilities	4
Other liabilities	72
Total liabilities assumed	76
Net assets acquired	$	509

Other intangible assets acquired are based on initial estimates and subject to change based on final valuations during the measurement period after the acquisition date. The following chart provides information about other intangible assets acquired during 2017:

Prior-Year Acquisitions

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


•	February – 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 the first three months of 2016 was $103 million, which consisted of cash paid of $77 million and deferred purchase and estimated contingent consideration of $26 million. Contingent consideration arrangements are primarily based on EBITDA or revenue targets over three 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. In the first three months of 2016, the Company also paid $25 million of deferred purchase consideration and $18 million of contingent consideration related to acquisitions made in prior years.

Pro-Forma Information

The following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during 2017 and 2016. 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, 2016 and reflects acquisitions made in 2016 as if they occurred on January 1, 2015. The unaudited 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.



	Three Months Ended March 31,
(In millions, except per share figures)	2017		2016
Revenue	$	3,515	$	3,460
Net income attributable to the Company	$	568	$	481
Basic net income per share attributable to the Company	$	1.10	$	0.92
Diluted net income per share attributable to the Company	$	1.09	$	0.91

The consolidated statement of income includes the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three month period ended March 31, 2017 include approximately $28 million of revenue and $10 million of operating income related to acquisitions made in 2017.

Acquisition-related expenses incurred in the first three months of 2017 were less than $1 million.

Weighted Average Amortization Period

Client relationships