Aon to buy Hewitt in a $4.9 Billion deal
By siliconindia   |   Tuesday, 13 July 2010, 18:03 IST   |    3 Comments
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Aon to buy Hewitt in a $4.9 Billion deal
Bangalore: Insurance broker Aon will spend $4.9 billion to buy Hewitt Associates, a human resources consulting and outsourcing company. Aon, in its largest-ever deal, would issue 64 million shares and pay a 41 percent premium for Hewitt. Hewitt, based in Lincolnshire, Illinois, is a human resources consulting and outsourcing company. Aon, the world's largest insurance brokerage, announced on Monday a $50 per share offer for Hewitt, consisting of $25.61 in cash and 0.6362 in Aon stock. Aon shares closed at $38.34 on Friday. The Chicago-based Aon plans to integrate Hewitt with its existing consulting and outsourcing operations and create a new unit, Aon Hewitt, after the deal closes. Russ Fradin, chairman and chief executive officer of Hewitt, will become chairman and CEO of Aon Hewitt. Aon expects the deal will save $355 million annually beginning in 2013, primarily from reducing back-office areas, management overlap and public company costs and getting more from technology platforms. It said the deal will help earnings in 2011 and 2012. In 2009, Aon's consulting business had revenue of about $1.2 billion. With the Hewitt purchase, its revenue would grow to $4.3 billion. The deal is expected to close by mid-November.

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