Today, Marsh McLennan announced a deal to acquire McGriff Insurance Services for $7.75 billion. The transaction, through the Marsh McLennan Agency business, is expected to close by the end of 2024 and will enhance Marsh McLennan Agency's operations across commercial property & casualty insurance, employee benefits, management liability and personal lines, according to the company's press release.

McGriff, an affiliate of private-equity backed TIH, formerly Truist Insurance Holdings, is an insurance broking and risk management services company based in Charlotte, North Carolina, with a $1.3 billion revenue for the trailing twelve months ending June 30, 2024.

Marsh McLennan is currently the biggest broker in the U.S. with $22.7 billion in revenue in 2023.

Marsh McLennan will pay $7.75 billion in cash consideration and will assume a deferred tax asset valued at $500 million. When the deal closes, the McGriff team of more than 3,500 employees, including CEO Read Davis, will join Marsh McLennan Agency and continue to operate from their existing office locations.

“McGriff is a business with excellent leadership, outstanding talent and a record of strong growth," said John Doyle, president and CEO of Marsh McLennan. “The firm complements Marsh McLennan Agency's capabilities and culture, and I am excited about future opportunities with them as part of our company."

“Marsh McLennan's global resources and insights will enable us to deliver even greater value to those we serve while creating exciting opportunities for the growth and development of our team," said Read Davis, CEO of McGriff. “This combination is a reflection of the quality of the McGriff team, and I am excited for our future together."

During the first half of 2024, there were 300 announced insurance agency mergers and acquisitions—an amount that, while down 20% from the first half of 2023, still represents a healthy market for independent agency M&A, according to OPTIS Partners. OPTIS predicted a continuation of larger transactions into 2025, “considering the challenges large buyers have to move the 'growth needle' and the difficulties of some large firms to internally perpetuate," it said in a July report.

Another factor that may influence near-future M&A trends is a potential increase in capital gains tax rates if Vice President-elect Kamala Harris wins the November presidential election. Harris' tax plans include a new all-in suggested capital gains tax rate of 33%, a significant hike compared to the current rate of 23.8%. Historically, deal activity in the insurance industry has jumped as tax changes loom, according to Reagan Consulting.

AnneMarie McPherson Spears is IA news editor.