Aon Corporation purchases Hewitt Associates, creates Aon Hewitt
In a deal worth almost $5 billion, consulting and insurance company Aon Corporation is buying HR outsourcing firm Hewitt Associates. The newly-formed Aon Hewitt division will function much like Hewitt Associates did before the purchase. The companies estimate that this merger will eventually save the companies $355 million each year.
The Aon Hewitt purchase
Announced this morning and expected to close in November, the Aon purchase of Hewitt Associates will cost $4.9 billion. Aon Corporation is paying about $50 per share for Hewitt Associates, about 41 percent more than current value. Current Hewitt stockholders will get $25.61 in cash and .63 pieces of stock in Aon Corporation. Aon Hewitt will keep the same CEO and business model as Hewitt Associates while combining back-office operations with Aon. After news of this purchase, Hewitt Associates stock jumped, while Aon stock fell on Monday morning. This new company will be based in Illinois. No word yet on how many employees of Aon or Hewitt may lose their jobs during this combination of business operations.
The business of Aon Corporation
Aon Corporation is a global “risk management and human capital consulting services” business. The company offers advice and insurance brokering services to clients. The company is traded on the New York Stock Exchange and is classified as a financial business. Just one year ago, in August of 2009, Aon Corporation shed three separate insurance companies from its business model.
Hewitt Associates’ business
Hewitt Associates is a business that focuses on human resource outsourcing. Companies that contract with Hewitt get services such as hiring, HR management and benefits administration. Hewitt also provides some consulting services. Traded on the New York Stock Exchange, Hewitt is a “commercial service and supply” business. Hewitt Associates has been through some major restructuring lately. The Latin American section of its business has been spun off, the “Executive Compensation Consulting” business has been partially spun off and HRAdvance Inc. was purchased in May of 2010.