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July 12, 2010 at 08:00 PM
By Trevor Thomas, National Underwriter Life & Health
Chicago-based Aon Corp will acquire Hewitt Associates Inc., based in Lincolnshire, Illinois (NYSE:HEW), and merge Hewitt into the Aon Consulting unit in a deal with a value of about $4.9 billion, the companies said Monday, July 12, in a joint announcement.
Aon is set to pay $50 per Hewitt share with a 50-50 blend of cash and Aon stock. Hewitt shares closed at $35.40 on July 9.
To complete the deal, Aon and Hewitt need approvals from the shareholders of both companies as well as from regulators. The companies hope to close on the transaction in mid-November.
If the deal is completed as planned, Hewitt Chairman Russell Fradin will become chairman of a new Aon Hewitt consulting unit and report to Aon Corp. Chief Executive Gregory Case, according to Aon and Hewitt.
Aon has more than 36,000 employees in more than 500 offices over 120 countries. The company as a whole reported $792 million in net income for 2009 on $7.6 billion in revenue; the company’s consulting and outsourcing business reported $203 million in operating income on $1.3 billion in revenue.
Hewitt was established in 1940 and now employs about 23,000 individuals worldwide. It reported $265 million in net income on $3.1 billion in revenue for its 2009 fiscal year, which ended Sept. 30, 2009.
Aon Consulting’s corporate clients tend to be midsize employers; most of Hewitt’s clients are large corporations.
