Insurance broker Lockton Inc., Kansas City, Mo., said it willexpand its operations internationally and acquire the London-basedbrokerage business of Alexander Forbes Limited for $170million.

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John L. Lumelleau, Lockton's chief executive officer, said theall-cash transaction is another step for the company that viewsitself as an alternative to larger global insurance brokers. Thedeal is expected to be completed by the end of October of thisyear.

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Currently, Lockton has 14 locations throughout the United Statesin all the major cities. With the announcement of this acquisition,it now “has a global platform to make the kind of investments thatwill allow us to extend our base to our clients around the worldand deliver our high level of service,” he said.

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The deal would combine $409 million of Lockton's 2005-2006revenues and 2,100 people with Alexander Forbes $202 million inrevenue and staff of 1,600 people, for a combined $611 million andworldwide staff of 3,700. It will now serve clients from 142 localoffices in 43 countries.

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Mr. Lumelleau said there will be no overlap in professionals orservices, which would result in reduction in staff.

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The deal does not involve Alexander Forbes' InternationalFinancial Services business.

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In company statements, Lockton and Alexander Forbes said thecompanies have worked together to place business in the past, butthis is a new opportunity to combine efforts.

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“We see this as a growth opportunity in terms of both revenueand people,” said Mr. Lumelleau.

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He said besides expanding the firm's geographic reach, it wouldalso complement a number of niche businesses and open newopportunities such as in marine and professional liabilityinsurance in Europe, primarily errors and omissions forattorneys.

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The Alexander Forbes business will be renamed LocktonInternational Holdings Limited and remain based in London.

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Mike Hammond, deputy chairman of Alexander Forbes Insurance,will become executive chairman of Lockton International. JohnPercy-Davis, executive chairman of Alexander Forbes, will remain inhis position as chairman of EOS RISQ, the European brokerpartnership, and continue to work closely with Lockton.

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Lockton will hold majority ownership in Lockton International,with minority investment from management and Trident III, L.P., aninvestment fund managed by Stone Point Capital, LLC of Greenwich,Conn.

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