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LONDON-Sedgwick Group P.L.C. said last week that the prospect for growth in its employee benefits business would be a key advantage of the proposed merger of its southern European and Latin American operations with those of Italy's leading broker.
Giving further details of the proposed joint venture with Milan-based Gruppo Nikols, Sedgwick Chairman Sax Riley said it should be "earnings enhancing" in 1998 and would "over time" lead to an increased flow of business to Sedgwick's London market operations. The deal, announced in April (BI, April 21, 1997) is expected to be completed, pending shareholder approval, by the end of the year.
Mr. Riley said "there is significant growth potential in the southern European markets" for employee benefits business. Sedgwick is the world's third-largest broker.
Apart from being the largest insurance broker in Italy, Nikols Sedgwick B.V., as the joint venture will be called will merge Sedgwick and Nikols operations in Spain, Portugal, Argentina, Brazil, Chile and Colombia.
It will be 51% owned by the company that owns Nikols, Securfin S.p.A., which is owned by the Moratti family of Italy.
Letizia Moratti, chairman of Gruppo Nikols, will become executive chairman of Nikols Sedgwick. She also will join Sedgwick's board.
Commenting on the joint venture, Ms. Moratti said one of its objectives is to make Nikols Sedgwick "the leading broker in southern Europe and Latin America."
She added that it would enable Nikols to offer its clients a global service and the use of the Sedgwick network to guarantee a standard level of quality worldwide. It will furthermore enable Nikols "to develop its expertise in the fields of employee benefits, pension funds and innovative financial products and risk management."
Nikols is contributing businesses that in 1996 had brokerage and fees worth (British pounds) 39.2 million ($63.9 million), while Sedgwick is contributing business that in 1996 had brokerage and fees of (British pounds) 12.4 million ($20.2 million). As a result, Sedgwick will be making a "balancing" payment on completion of the joint venture of (British pounds) 10 million ($16.3 million).
The joint venture is part of Sedgwick's strategy to increase revenues through alliances and partnerships.
Meanwhile, London insurance broker Willis Corroon Group P.L.C. has unveiled plans to merge its independent financial adviser operations with those of U.K. bank Abbey National P.L.C.
The new company, Willis National, will be 51% owned by Willis Corroon and 49% by Abbey National and is expected, subject to regulatory approval, to be operating by the end of the year.
George Nixon, the Willis Corroon director responsible for U.K. retail operations, said the two businesses are complementary. Abbey National's strengths lie in advising individuals about investments and retirement planning, while Willis Corroon's financial planning unit focuses on corporate business, such as insured pension plans and personal advice for senior employees.