Marsh & McLennan Companies Inc. said it has sold its investment subsidiary Putnam Investments for $3.9 billion to a Canadian investment firm.

This morning's announcement said the New York-based services company, the parent company of the insurance brokerage firm Marsh Inc., has sold Putnam to Great-West Lifeco Inc., a financial services holding company controlled by Canada-based Power Financial Corp.

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

MMC said Putnam had $192 billion under management at the end of 2006.

Michael G. Cherkasky, MMC's president and chief executive officer, said: "This is an important transaction for MMC and its shareholders. We will receive an attractive price for Putnam, strengthen our ability to focus on our core businesses, and significantly enhance our financial flexibility."

He said the proceeds would go to investments in MMC, stock repurchases and debt reduction.

Goldman, Sachs & Co. and Merrill Lynch & Co. acted as MMC's financial advisors for the transaction. Davis Polk & Wardwell acted as MMC's legal counsel.

In an analyst's note, Bear Stearns' David Small said the sale price was at the low end of what was expected, but on the positive side, it is an all cash deal.

On the negative side, he mentioned that no debt was transferred with the sale, and there may be a 10 cent dilution in earning per share on an annualized basis.

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MMC Sells Putnam For $4B

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