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Arthur J Gallagher plans to purchase Wesfarmers Insurance Brokerage

Arthur J Gallagher & Co (AJG), an insurance brokerage and risk management services firm based in Illinois, has reached an agreement to acquire the Wesfarmers Insurance Brokerage operations, in a transaction valued at nearly A$1bn ($933m).

Arthur J

Gallagher plans to finance the transaction using free cash, borrowing on its line of credit and proceeds from the issuance of equity.

The takeover, which comprises the OAMPS businesses in Australia and the UK, Crombie Lockwood in New Zealand and the associated premium funding operations, is expected to conclude during the second or third quarter of 2014, after regulatory approvals.

As of 30 June 2013, Wesfarmers Insurance Brokerage operations generated A$331.1m ($306m) in revenue with nearly 1,700 people operating out of over 50 branches throughout Australia, New Zealand and the UK.

Commenting on the acquisition, Arthur J Gallagher & Co chairman, president and CEO J. Patrick Gallagher, Jr., said, "This acquisition represents an important strategic step for our company by significantly expanding our presence in Australia and New Zealand.

"Together we will have a tremendous platform for growth as we expand throughout Australasia. Our combined operations will become one of the largest insurance brokers in Australia and New Zealand.

"Their focus on middle-market clients aligns well with our global client base and will provide us opportunities to bring our full range of services to their existing clients and prospects."

Under the terms of the deal, Steve Lockwood will manage Gallagher’s property/casualty insurance brokerage operations in Australasia and will report directly to Tom Gallagher, head of Gallagher international operations.

Arthur J Gallagher & Co operates in 25 nations and offers client-service capabilities in more than 140 countries globally, leveraging a network of correspondent brokers and consultants.
Image: Arthur J Gallagher & Co corporate headquarters in Itasca, Illinois. Photo courtesy of: Arthur J.
Gallagher & Co. 1999 -2014.