Marsh & McLennan's chief executive said the company sold offits Putnam investment unit because the $4 billion price was rightand a spin-off would probably have crippled the new company withdebt.

During a conference call held this morning to discuss the saleof New York-based MMC's Putnam investment fund arm, Michael G.Cherkasky, president and chief executive officer of the company,said, "If it hadn't been this kind of price it could have been adifferent decision for us."

He said the capital infusion will allow the firm to make futureacquisitions.

MMC, the parent company of insurance brokerage firm Marsh Inc.,sold Putnam Investments for $3.9 billion to Great-West Lifeco Inc.,a financial services holding company controlled by Canada-basedPower Financial Corporation.

The deal is expected to close in the middle of the year and issubject to regulatory approval.

The all-cash deal will be paid through a combination of loansand management investment, said Raymond McFeetors, president andCEO of Great West Lifeco, during a news conference held later.

Mr. Cherkasky said the decision to sell Putnam came about afterthe company received several unsolicited bids for the firm. Therewas also a strategic decision made that MMC needed to concentrateon risk and human capital services, and the investment firm did notfit in with those plans.

A spin-off of Putnam would not have been in the best interest ofshareholders, said Mr. Cherkasky, because the stand-alone companywould have been burdened with too much debt and would not be in astrong financial position to survive a downturn in the markets.

Putnam, ranked the tenth largest investment firm, handled $192billion in assets under management by the end of 2006, MMC said. In2003 the Boston-based firm was investigated for trading abuses andsaw investors pull $4 billion in funds. The next year the companypaid $50 million in fines.

For its part, Mr. McFeetors called it a remarkable acquisitionat 14.5 times multiples. The deal also includes Putnam's 25 percentstake in T.H. Lee Partners, a private equity firm, and tax benefitsthe company plans to securitize for $550 million.

The deal includes no transfer of debt to Great-West. Accordingto Capital IQ, MMC currently lists its debt at $5.08 billion on itsbalance sheet.

During the conference call, MMC executives would not state howmuch debt Putnam would have been saddled with in a spin-off.

Mr. McFeetors' description of the sale price caused criticismfrom at least one analyst who questioned whether MMC got sufficientvalue.

Mr. Cherkasky responded that the sale would not have taken placeif the company had not gotten the price it was looking for.

"We know we won," he said. "We believe it is a great transactionfor us, and they believe it is a great transaction for them."

Mr. Cherkasky indicated that besides paying down debt and buyingback stock, the sale will also allow MMC to begin makingacquisitions. He did not indicate when such deals would be takingplace.

Ed Hardeman, president and CEO of Putnam, speaking during theGreat-West news conference, said the management team will remainintact and that the fund will show significant improvement in thefourth quarter when MMC releases its financials. Mr. McFeetors saidPutnam will act as a separate company with its own board ofdirectors.

Mr. Cherkasky announced MMC would consider a sale of Putnam inSeptember after months of denying the company had any interest indoing so. Earlier this month, reports began to circulate that adeal between Great-West and MMC was in the works, but there was noacknowledgment of the prospects until today.