Acquisitions and 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 values of the net tangible assets and the identifiable intangible assets purchased, which typically consist of customer lists, developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets involves significant estimates and assumptions. Refinement and completion of final valuation of net assets acquired 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 2019.


•	February – MMA acquired Bouchard Insurance, Inc., a Florida-based full service agency and Employee Benefits Group, Inc., a Maryland-based independent insurance agency.

Total purchase consideration for acquisitions made during the three months ended March 31, 2019 was $177 million, which consisted of cash paid of $142 million and deferred purchase and estimated contingent consideration of $35 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 $23 million of deferred purchase consideration and $35 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 2019 based on their fair values:



For the Three Months Ended March 31, 2019
(In millions)
Cash	$	142
Estimated fair value of deferred/contingent consideration	35
Total consideration	$	177
Allocation of purchase price:
Cash and cash equivalents	$	2
Accounts receivable, net	5
Property, plant, and equipment	1
Other intangible assets	71
Goodwill	97
Other assets	6
Total assets acquired	182
Current liabilities	5
Other liabilities	—
Total liabilities assumed	5
Net assets acquired	$	177

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 2019:

In January 2019, Marsh increased its equity ownership in Marsh India from 26% to 49%. Marsh India continues to be accounted for under the equity method.

Prior-Year Acquisitions

The Risk and Insurance Services segment completed twelve acquisitions during 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.


•	May – Marsh acquired Mountlodge Limited, a Scotland-based independent insurance broker and Lorant Martínez Salas y Compañía Agente de Seguros y de Fianzas, S.A. de C.V., a Mexico-based multi-line insurance broker.


•	June – MMA acquired Bleakley Insurance Services, a California-based provider of employee benefits solutions; Klein Agency, Inc., a Minnesota-based surety and property/casualty agency; and Insurance Associates, Inc., a Maryland-based independent insurance agency.


•	August – Marsh acquired John L. Wortham & Son, L.P., a Houston-based independent insurance broker.


•	October – MMA acquired Eustis Insurance, Inc., a Louisiana-based insurance agency.


•	November – MMA acquired James P. Murphy & Associates, Inc., a Connecticut-based insurance agency.


•	December – MMA acquired Otis-Magie Insurance Agency, Inc., a Minnesota-based insurance agency, and Marsh acquired Hector Insurance PCC Ltd, a U.K.-based captive management company.

The Consulting segment completed eight acquisitions during 2018.


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


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


•	May – Mercer acquired EverBe SAS, a France-based Workday implementer and advisory firm; and Evolve Intelligence Pty Ltd., an Australia-based talent strategy firm.


•	June – Mercer acquired India Life Capital Private Ltd., an India-based investment advisor.


•	November – Mercer acquired Induslynk Training Services Private Ltd., an India-based talent assessment company, Pavilion Financial Corp., a Canada-based investment services firm and Summit Strategies Inc., a Missouri-based investment consulting firm.

Total purchase consideration for acquisitions made during the first three months of 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 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 2018, the Company also paid $40 million of deferred purchase consideration and $40 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 2019 and 2018. 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, 2018 and reflects acquisitions made in 2018 as if they occurred on January 1, 2017. 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)	2019		2018
Revenue	$	4,080	$	4,098
Net income attributable to the Company	$	717	$	694
Basic net income per share attributable to the Company	$	1.42	$	1.37
Diluted net income per share attributable to the Company	$	1.40	$	1.35

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, 2019 includes approximately $4 million of revenue and an operating gain of less than $1 million for acquisitions made in 2019. The consolidated statements of income for the three month period ended March 31, 2018 included $3 million of revenue and an operating loss of $1 million related to acquisitions made in 2018.

Subsequent Event - Acquisition of JLT

On April 1, 2019, the Company completed its previously announced Transaction of all of the outstanding shares of JLT. Under the terms of the Transaction, JLT shareholders received £19.15 in cash for each JLT share, which valued JLT’s existing issued and to be issued share capital at approximately £4.3 billion (or approximately $5.6 billion based on an exchange rate of U.S. $1.31:£1) and assumed existing JLT indebtedness of approximately $1 billion. The Company implemented the Transaction by way of a scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006, as amended. The pro-forma information above excludes the results of JLT because it was not practicable due to the timing of when the acquisition occurred, and to include such information would require significant estimates related to the impact of adjustments from JLT's historical accounting under International Accounting Standards to U.S. GAAP and to the allocation of purchase consideration.

Financing and hedging activities related to the Transaction are discussed in more detail in Notes 11 and 14 of the consolidated financial statements.

Weighted Average Amortization Period

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