Aon will acquire Hewitt Associates for $ 4.9 billion
Tuesday, July 13th, 2010Aon Corp., the world's first insurance broker, announced Monday it would buy the company for HR services to Hewitt Associates, about 4.9 billion dollars (3.9 billion euros) in cash and stock.
The offer represents Aon Hewitt $ 50 per share, a premium of 41% over its closing price Friday.
The transaction will allow Aon to gain a foothold in the area of human resources and benefits outsourcing and compete and Mercer, a subsidiary of Marsh and McLennan rival.
Aon plans to merge Hewitt with his own business consulting and outsourcing and expects an annual turnover of 4.3 billion dollars for the new entity to be called Aon Hewitt.
Russ Fradin, CEO of Hewitt, Hewitt will lead Aon.
Aon expects the transaction will have a positive impact on its performance in 2011 and 2012 and expects about $ 355 million of cost reductions in 2013, mainly administrative.
It is the second major operation in a year in the area of the board after the merger between Towers Perrin and Watson Wyatt for $ 3.5 billion, which gave birth to the number one global human resources consulting.
Aon intends to fund the acquisition with a bridge loan of 1.5 billion dollars and a bank loan of one billion dollars.
The action of Hewitt jumped more than 30% before the official opening of trading after closing Friday at 35.40 dollars at the NYSE. Aon closed at 38.34 dollars.