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LONDON-The merger of Johnson & Higgins with Marsh & McLennan Cos

Inc. is causing major reverberations across the Atlantic Ocean for at least five of the world's other largest brokers.

The merger will directly affect Jauch & Huebener KGaA in Germany and Gras Savoye S.A. in France, which are partners with J&H in the UNISON network.

In addition, some analysts wonder whether the latest mega-merger means London-based Sedgwick Group P.L.C. and Willis Corroon Group P.L.C. now must merge to compete with bigger brokers.

The merger also leaves London-based Minet Group's future in question. Minet's parent, The St. Paul Cos. Inc., confirmed in January that it was talking to M&M about a sale (BI, Jan. 27).

"Discussions are continuing, and we hope they will be successfully completed," said Minet Chairman and Chief Executive Peter Christie. Mr. Christie said it is premature to talk about how Minet's operations would combine with J&H Marsh & McLennan Inc.

J&H has been the backbone of UNISON, which is a combination of subsidiaries, joint ventures and corresponding brokers in 72 countries. J&H owns 100% of the operations in 20 countries, has majority or minority shares in operations in 12 countries and has correspondent relationships, where it has no shareholdings, in the remaining 40 countries (BI, July 22, 1996).

The two main UNISON partners other than J&H are Gras Savoye and Jauch & Huebener.

Willis Faber P.L.C. also belonged to the network until it merged in 1990 with Corroon & Black Corp. to form Willis Corroon Group P.L.C.

There is speculation that UNISON will die after the merger announced last week unless another major broker decides to take J&H's place.

J&H Chairman David A. Olsen said it is still unclear what impact the deal will have on relationships with independent UNISON partners or those in which J&H has only a minority stake. J&H officials will be meeting with those partners shortly, he said.

Asked if M&M might consider buying UNISON partners like Jauch & Huebener or Gras Savoye, M&M Chairman A.J.C. Smith replied, "I never like to rule anything out. If you can add strong professional capability anywhere in a business you think has great potential, it's a good thing."

He added, though, that "clearly, we do not need to make strategic acquisitions in very many places geographically."

A Gras Savoye spokesman said, "We don't know if the UNISON network will live or die. (Gras Savoye Chairman) Patrick Lucas is working with the partners in the UNISON network. There is no decision for the moment."

The UNISON partners "can either sell out to Marsh Mac, who are open to offers. . .or tie up with somebody else-Sedgwick or Willis maybe," said Tony Silverman, stock analyst for NatWest Securities in London. Otherwise, "I guess UNISON wouldn't survive. It is likely that each individual UNISON partner will be looking after itself."

Jauch & Huebener executives will meet with J&H executives early this week "doesn't want to be bought. It wants to stay independent. Our first objective is to work for the clients and then to be independent and French-these are our main ideas at the moment," said the Gras Savoye spokesman.

Last week's merger "is a very important event for our group, but has no effect on us (directly), because J&H has no operations in France other than (Gras Savoye)," said Mohammed Dahbi, chief executive of M&M's Faugere & Jutheau in Paris.

Faugere & Jutheau still is in the early stages of merging with CECAR, which M&M bought earlier this year (BI, Feb. 3).

Meanwhile, Sedgwick and Willis will remain the third- and fourth-largest brokers, respectively, after both last week's merger and Aon Group Inc.'s acquisition earlier this year of Alexander & Alexander Services Inc. However, M&M and Aon dwarf Sedgwick and Willis.

Sedgwick has said it would be open to a merger, but Willis continuously has said it wants to remain independent and focus on its strengths.

"The deal will put further pressure on both Sedgwick and Willis to re-evaluate their respective strategies," said Julianne Jessup, a stock analyst for UBS Ltd. "It will be particularly disappointing for Willis, where hopes were growing that the former close relationship with J&H could be revived. However, this deal also weakens Sedgwick's relative position."

Sedgwick is now only half the size of both Aon and M&M, and Willis is only about one-third the size in terms of revenues, said Ms. Jessup.

Although merging may have its risks for Sedgwick and Willis, doing nothing also is "a high-risk strategy," said Ms. Jessup "An eventual deal between the two looks ever more likely."

Added Mr. Silverman of Natwest Securities, "Sedgwick and Willis in the long term will have to talk to each other." While Willis is focusing on certain strengths, such as international reinsurance, marine, aerospace and aviation, Sedgwick maintains its broad retail brokerage approach. "It might be that Sedgwick looks to be more vulnerable strategically than Willis," he said.

Sax Riley, chairman of Sedgwick, would not comment.

Max Taylor, chief executive of Willis, said the company has made its position "absolutely clear" to its employees that it will continue with its strategy of remaining independent and focusing on its core strengths.

However, asked about possible mergers in the future, Mr. Taylor said, "We never rule anything in or out."

Mr. Taylor added that the deals by Aon and M&M present "all sorts of opportunities." Teams of people may be looking for new homes; companies may be looking for new partners; and clients may become disenchanted.

"Even Ian Smith (chairman and chief executive officer of M&M Cos.) once said that it's not how big you are but how good you are. We support that," said Mr. Taylor.

Sarah Goddard, Mark A. Hofmann and Don Lewis Kirk contributed to this report.