Marsh acquires Kroll in $1.9 billion cash deal.
Under the definitive agreement, Marsh will pay $37 for each outstanding share of Kroll common stock, a 31.7% premium over Kroll's closing stock price of $28.10 a share on May 18. The boards of the two companies unanimously agreed to the transaction, which is to be voted on by Kroll shareholders, according to Kroll.
Shares of Kroll skyrocketed on news of the sale. The stock was up 29.93% to $36.51 a share on the afternoon of May 19. Marsh's stock was at $43.40 a share, up 1.54%.
Kroll Chief Executive Officer Michael Cherkasky said the stock owned by himself, Kroll and the rest of senior management represents more than 10% of outstanding common stock, which would be voted in favor of the acquisition. Jules Kroll, founder and executive chairman of Kroll, owns 7.3% of the company's stock.
The fifth-largest institutional shareholder of Kroll is American International Group Inc. which at year-end 2003 held 1.46 million shares, or 3.74% of shares outstanding, valued at nearly $38 million.
Cherkasky said he would continue to lead Kroll, which would retain its brand name and be combined with Marsh Risk Consulting. Jules Kroll would become a vice chairman of Marsh.