Analysis: And so the consolidation mania rolls on
It was on the stage at the Insurance Times Broker Forum in July that Oval boss Philip Hodson declared that he could see one of the big three eating up a top ten broker. It was not lost on the audience that day that by his side sat Chris Giles, the man who had courted Oval and just about every other major broking house for months with a view to making a transformational acquisition.
So, the link this week between Marsh and Oval is not a shock but still a surprise.
Just two weeks ago at the Insurance Times leaders’ Forum Marsh chief executive Martin South expressed his appetite for a deal. And it is about time too. UK chief executive Brendan McManus has already publicly ruled Willis out of any major UK acquisition as its strategy appears to be heading down the managed general agency route. Aon is dumbstruck by the cost cutting associated with the Benfield deal leaving only JLT in competition at the top to snap the blue stock broking businesses up. But as chief executive Dominic Burke, renowned for his prudence, told Insurance Times recently, he would only do a big deal if the price was right - and that's not happening anytime soon.
The indications coming from inside Marsh and Oval are that all talks are off, and there are no lines of communication. Indeed, Hodson has publicly dismissed the speculation as "absurd". However, you can be sure that talks did take place at some level and for whatever reason, came a cropper. Money is the usual sticking point in any such negotiation.
Should the problems be resolved and a deal between Oval and Marsh, or another one of the nationals, go all the way it leaves a question mark as to what the next move will be for Chris Giles. Oval was largely considered to be Giles', and his backer Charterhouse’s, first prize acquisition, but Heath Lambert or a stretched deal for Bluefin at the right price may fit next in his widow of opportunity should the funds be made available and AXA UK chief executive Philippe Maso presses the sale button. But, on the face of it, even in recession and decline, the acquisition mania is continuing to roll on.