Insurance broker Aon to buy Hewitt Associates for $4.9 billion
12 July 2010
Aon Corp., the world's largest insurance broker, today said that it has agreed to buy to human resources company Hewitt Associates Inc. for $4.9 billion to expand its consulting and outsourcing business.
Chicago-based Aon, best known as the sponsors for English football club Manchester United, is buying Hewitt Associates, a leading human resources consulting and outsourcing solutions company in a cash and stock deal.
Shareholders of Lincolnshire, Illinois-based Hewitt will receive $25.61 in cash and 0.6362 of an Aon share, taking the total value of the offer to $50 a share, a 41 per cent premium to Hewitt's closing price on 9 July 2010.
Aon is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. It has more than 36,000 associates worldwide and more than 500 offices in more than 120 countries.
Aon tops the business insurance's rfankings of the world's largest insurance brokers, based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009.
Aon said that post closing it intends to integrate Hewitt with its existing consulting and outsourcing operations Aon Consulting and operate the segment globally under the newly created Aon Hewitt brand.
"This agreement reflects our ongoing efforts to ensure that Aon's associates, capabilities and technology remain at the forefront of our industry, providing distinctive client value," said Greg Case, chief executive officer, Aon Corporation. "As we continue to grow our business, this merger will give us a broader portfolio of innovative products and services focused on what we believe are two of the most important topics in the global economy today – risk and people."
Aon expects the deal will save $355 million annually beginning in 2013, most of it coming from mostly from reduction in back-office in back-office areas, public company costs, management overlap and leverage of technology platforms.