Acquisitions

The Company has continued its strategy to grow its businesses and build shareholder value through strategic 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 assets.

The Risk and Insurance Services segment completed two acquisitions during the first three months of 2018.


•	February – MMA acquired Highsmith Insurance Agency, a North Carolina-based independent insurance brokerage firm.


•	March – Marsh acquired Hoken Soken, Inc., a Japan-based insurance agency.

The Consulting segment completed two acquisitions during the first three months of 2018.


•	January – Oliver Wyman acquired Draw, a U.K.-based digital transformation agency.


•	March – Oliver Wyman acquired 8Works Limited, a U.K.-based design thinking consultancy.

Total purchase consideration for acquisitions made during the three months ended March 31, 2018 was $36 million, which consisted of cash paid of $29 million and deferred purchase and estimated contingent consideration of $7 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 or 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 $40 million of deferred purchase consideration and $40 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 2018 based on their fair values:



For the Three Months Ended March 31, 2018
(In millions)
Cash	$	29
Estimated fair value of deferred/contingent consideration	7
Total Consideration	$	36
Allocation of purchase price:
Cash and cash equivalents	$	5
Accounts receivable, net	3
Other intangible assets	13
Goodwill	15
Other assets	4
Total assets acquired	40
Current liabilities	3
Other liabilities	1
Total liabilities assumed	4
Net assets acquired	$	36

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 about other intangible assets acquired during 2018:

Prior-Year Acquisitions

The Risk and Insurance Services segment completed seven acquisitions during 2017.


•	January – MMA acquired J. Smith Lanier & Co. ("JSL"), a privately held insurance brokerage firm providing insurance, risk management, and employee benefits solutions to businesses and individuals throughout the U.S.


•	February – MMA acquired iaConsulting, 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.


•	May – MMA acquired Insurance Partners of Texas, a Texas-based employee benefits consulting firm.


•	August – Marsh acquired International Catastrophe Insurance Managers, LLC, a Colorado-based managing general agent providing property catastrophe insurance to business and homeowners, and MMA acquired Hendrick & Hendrick, Inc., a Texas-based insurance agency.

The Consulting segment completed three acquisitions during 2017.


•	August – Mercer acquired Jaeson Associates, a Portugal-based talent management consulting organization.


•	December – Mercer acquired Promerit AG, a Germany-based consultancy specializing in HR digitalization and business and HR transformation and BFC Asset Management Co., Ltd., a Japan-based independently owned asset manager, focused on alternative investment strategies.

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 primarily based on EBITDA or revenue targets over a period of two to four years. The fair value of the contingent consideration was based on projected revenue or 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 2017, the Company also paid $26 million of deferred purchase consideration and $12 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 2018 and 2017. 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, 2017 and reflects acquisitions made in 2017 as if they occurred on January 1, 2016. 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)	2018		2017
Revenue	$	4,002	$	3,539
Net income attributable to the Company	$	690	$	569
Basic net income per share attributable to the Company	$	1.36	$	1.11
Diluted net income per share attributable to the Company	$	1.34	$	1.09

The consolidated statements of income include 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, 2018 included approximately $3 million of revenue and an operating loss of $1 million for acquisitions made in 2018. The consolidated statements of income for the three month period ended March 31, 2017 included $28 million of revenue and operating income of $10 million related to acquisitions made in 2017.

Weighted Average Amortization Period

Client relationships