Peltz Cleared by FTC to Buy Marsh/McLennan Shares

NEW YORK (Reuters) - Activist billionaire investor Nelson Peltz and his companies have been cleared by the U.S. Federal Trade Commission to buy shares of insurance broker Marsh & McLennan Cos Inc (MMC.N), sending the stock higher on a day when other insurance stocks have declined.

Shares of Marsh & McLennan, which recently dismissed its chief executive, represent a new acquisition for Peltz. He is known for taking stakes in companies such as Cadbury Schweppes Plc (CBRY.L), Wendy's International Inc (WEN.N), and Kraft Foods Inc (KFT.N) and forcing changes. In the case of Wendy's, the changes could include a takeover.

Peltz recently filed to raise up to $750 million for a company that could be used to make an acquisition.

In afternoon trading, Marsh & McLennan rose 75 cents or 2.8 percent to $27.22 in New York Stock Exchange trading. The Standard & Poor's insurance index .GSPINSC was down about 1.5 percent.

Marsh & McLennan spokeswoman Christine Walton said her company was aware of the FTC approval but had no further comment. A spokeswoman for Peltz's interests declined comment.

The FTC approval provides an early end to a review of Peltz's plan to buy shares in Marsh & McLennan, one of the world's largest insurance brokers.

But the FTC notice dated Dec. 31 announcing the approval provides no indication of how many shares his companies, Trian Star Trust and Trian Partners LP, might buy. As of Sept. 30, Peltz's companies listed no shares in the New York-based insurance broker, according to filings with the U.S. Securities and Exchange Commission.

In December, Peltz sent shares of British confectionary maker Cadbury Schweppes higher when he urged a faster rate of change, warning that its sweets and drinks units might become takeover targets. Trian recently raised its stake in Cadbury to 4.5 percent from 3.5 percent.

In August, Wendy's said it reached a deal with Peltz that would allow his companies to review Wendy's books as they consider whether to make an offer for the hamburger chain.

Marsh & McLennan has been seen as a takeover target since mid-2006, when fellow broker Willis Group Holdings Ltd (WSH.N) and private equity firm Kohlberg Kravis Roberts [KKR.UL] were rumored to be interested in acquiring the company. The rumor was never denied.

On Dec. 21, after reporting disappointing earnings in its key brokerage unit, which negotiates insurance contracts for companies, Marsh & McLennan said it would replace Chief Executive Michael Cherkasky and "evaluate strategies to boost shareholder value."

"Now that Cherkasky has been pushed aside, there will be more pressure to split the company up, and an activist investor like Peltz is likely to push in that direction," said Rob Haines, an analyst with CreditSights.

(Reporting by Ed Leefeldt, editing by Gerald E. McCormick)