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NEW YORK -- William M. Mercer Cos. L.L.C.'s position as the world's largest benefit consultant will be solidified with the acquisition of Sedgwick Group P.L.C. by Marsh & McLennan Cos. Inc.

Mercer also will gain strength in several key overseas markets as a result of the deal.

With 1997 consulting revenues of roughly $1 billion, Mercer is more than one-third larger than Towers Perrin, its closest competitor.

Folding Sedgwick's benefit unit -- Sedgwick Noble Lowndes, with 1997 consulting revenues of about $325 million -- will considerably widen Mercer's lead as the largest benefit consultant, a longtime Mercer goal.

"We want clear daylight between us and our competitors. We want to be No. 1 in every major market. That is the nature of this organization," said Mercer President Peter Coster in New York.

The impact of the acquisition will be greatest outside the United States, where Sedgwick Noble Lowndes derives more than 75% of its consulting revenues. By acquiring Sedgwick Noble Lowndes, which its officials say is the largest benefit consultant in United Kingdom and Ireland, Mercer will assume the top position in those countries while adding to its lead as the largest consultant in Australia. Mercer currently is the second-largest benefit consultant in the United Kingdom and Ireland.

While Mercer and Sedgwick Noble Lowndes are market leaders in several key countries abroad, their market position and operations differ markedly in the United States.

Last year, Sedgwick Noble Lowdnes ranked as the 10th-largest U.S. benefit consultant with about $78 million in revenues, while Mercer ranked as the second-largest U.S. consultant with nearly $600 million in revenues.

More than size of operations separates the two consultants in the United States. While the client profile of the two firms is similar abroad, Sedgwick Noble Lowndes' U.S. clients tend to be much smaller -- generally firms with 100 to 2,000 employees -- than Mercer's.

In addition, a good chunk of Sedgwick Noble Lowndes' U.S. business is brokering of group health and other group insurance products. M&M's J&H Marsh & McLennan unit, rather than Mercer, typically performs that function.

Indeed, in the United States, "I view Sedgwick Noble Lowndes far more as a brokerage than a consulting organization," said Donn Bleau, a principal at Global Resources Group, a San Diego-based executive recruiter.

For Sedgwick Noble Lowndes clients, especially in the United States, the benefits of the consultant's absorption by Mercer are obvious: access to a much greater depth and range of services. Sedgwick Noble Lowndes, for example, lacks a compensation practice and has only a tiny communications practice, while Mercer has large compensation and communications practices.

"This will bring enlarged resources to our clients. There will be a wider global spread of offices and consulting capabilities. We would hope our clients see this as a win-win situation," said Rob White-Cooper, Chief Executive at Sedgwick Group in London.

Some Sedgwick Noble Lowndes' clients agree.

"Mercer is very large and very reputable," said Tom Roth, executive vp of human resources at Loomis Fargo & Co. in Houston; Loomis used Sedgwick for benefits-related work connected to

the merger of Wells Fargo Armored Services and Loomis Armored Inc.

Mercer's absorption of Sedgwick Noble Lowndes, which should be completed by the end of the year, will be the second time in the past year and a half that Mercer has taken over a competitor.

Last year, as part of M&M's $1.8 billion purchase of Johnson & Higgins, Mercer acquired J&H's benefit consulting unit, A. Foster Higgins & Co. Inc.

Mercer's Mr. Coster said the lesson from the Foster Higgins absorption is to merge operations as quickly as possible.

Because consultants at both firms are very busy with client projects, Mr. Coster doubts there would be any significant layoffs as a result of the merger. If there are reductions in staff, those would be more likely to occur in the administrative area, he said.

The merger of Mercer and Sedgwick Noble Lowndes is only the latest in a series of acquisitions and consolidations that have swept the ranks of the nation's benefit consultants.

Those changes began early last year when Coopers & Lybrand L.L.P. acquired Kwasha Lipton L.L.C. Since then, Coopers & Lybrand, which last year was the world's fifth-largest benefit consulting unit, merged with Price Waterhouse L.L.P., with Kwasha becoming a part of the merged firms.

Also in 1997, Mellon Bank acquired Buck Consultants Inc.; Aon Group acquired Alexander & Alexander Services Inc.'s benefit consulting unit as part of its purchase of A&A; and Mercer acquired Foster Higgins.

Despite fewer large consulting firms from which to choose, buyers still enjoy a competitive market.

"I still think there are enough choices in the benefit community to promote healthy competition. The choices have not been so reduced that the industry has become monopolistic," Mr. Bleau said.

"Competition is very intense," Mercer's Mr. Coster said.

For employees at some consulting firms, though, it may seem that no sooner than they are at one firm they soon become part of another.