Marsh&McLennan Agrees to Sale of Putnam

Marsh&McLennan has agreed to sell its money-management unit for $3.9 billion to holding company Power Corp. of Canada, sources told the Wall Street Journal.
The win by Power Corp., which beat out other contenders Amvescap PLC and UniCredito Italiano SpA, is still pending approval of Putnam employees who own shares in the company, Putnam mutual-fund shareholders and the board that oversees the funds. The final deal is expected to be announced early next year, according to the Journal.

The sale could be welcome news to shareholders of the New York-financial giant, still recovering from a $850 million settlement in January 2005 of a lawsuit by New York Attorney General Eliot Spitzer alleging that Marsh steered its clients to insurers with which it had lucrative payoff agreements (See MMC Settles ‘Shameful’ Bid-Rigging Case).

Putnam, which has $191 billion in assets under management, also faced misconduct allegations, with the Securities and Exchange Commission (SEC) bringing charges against six former executives of its fiduciary trust arm for defrauding a retirement plan client and Putnam mutual funds of about $4 million (See SEC Charges Six Ex-Putnam Execs in Retirement Plan Fraud).