Insurance broker Aon agrees to buy HR firm Hewitt for $4.9 bn
Insurance broker Aon Corp. said on Monday that it had agreed to buy human resources company Hewitt Associates for $4.9 billion (Rs 22,932 crore) in cash and stock to expand its consulting operations.india Updated: Jul 12, 2010 23:25 IST
Insurance broker Aon Corp. said on Monday that it had agreed to buy human resources company Hewitt Associates for $4.9 billion (Rs 22,932 crore) in cash and stock to expand its consulting operations.
The insurance broker said it will pay $50 (Rs 2,340) per Hewitt share, a 41 per cent premium over Hewitt's closing price Friday of $35.40. Aon shares closed at $38.34 on Friday.
Aon, based in Chicago, 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.
Hewitt, based in Lincolnshire, Illinois, is a human resources consulting and outsourcing company.
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.
The company said the deal will help earnings in 2011 and 2012. Hewitt stockholders will receive $25.61 in cash and about 0.64 per cent of a share in Aon stock per Hewitt share. The total payment will be $2.45 billion in cash and 64 million shares. The deal is expected to close by mid-November.