Aon Corporation (NYSE: AON) today announced that it has completed its merger of Hewitt Associates, Inc. with a subsidiary of Aon, creating Aon Hewitt, the world's premier human capital solutions firm.
"The completion of this merger marks yet another important milestone in the history of Aon and is an industry-changing event that will create new standards in the human capital space," said Greg Case, president and chief executive officer of Aon. "Through Aon Hewitt, we will provide our clients with a broader portfolio of innovative products and services focused on what we believe are two of the most important topics facing today's global economy – risk and people."
Russ Fradin, chairman and chief executive officer of Aon Hewitt, added, "As Aon Hewitt, we are a stronger, more global industry leader, bringing innovative solutions and insights to organizations wherever they do business. Our focus remains constant—to serve clients exceptionally well every day. Clients can be confident Aon Hewitt has the expertise and experience to serve as a true partner, helping them with their most pressing business challenges."
Aon believes Aon Hewitt creates a global leader in human capital solutions and services, benefiting clients, colleagues and stockholders in several ways, including:
Aon Hewitt revenues of $4.3 billion and 29,000 colleagues globally. Combined revenues for fiscal year 2009 consist of 49% from consulting services, 40% from benefits administration and 11% from HR business process outsourcing, creating more resources for colleagues and more opportunities to distinctively serve clients with capabilities in greater than 120 countries around the world;
Leading global brand and client service recognition worldwide. Premier Hewitt brand will be leveraged along with Aon's client recognition to be leading employee benefits consulting firm;
Complementary product and service portfolio across consulting, benefits administration and HR business process outsourcing. Product portfolio will provide for significant cross-sell opportunities including the marketing of Hewitt's benefits administration and HR business process outsourcing services to Aon's clients, as well as the marketing of Aon's industry-leading risk services product portfolio to Hewitt's clients;
Diversified presence across large corporate and middle market. The combined client base will provide significant cross-sell opportunities to leverage Hewitt's predominantly large corporate client base with Aon's predominantly middle market client base;
Cost savings and operational efficiencies. The transaction is expected to generate approximately $355 million in annual cost savings across Aon Hewitt in 2013, primarily from reduction in back-office areas, public company costs, management overlap and leverage of technology platforms;
Expect to achieve a long-term operating margin in Aon Hewitt of 20%. Primarily through anticipated synergies and greater economies of scale, Aon Hewitt expects to deliver improved operational performance and a long-term operating margin of 20%;
Expect to create $1.5 billion of stockholder value. Strong cash flow generation of Hewitt, combined with expected synergies from the combination, are expected to deliver $1.5 billion of value creation for stockholders on a discounted cash flow basis, after subtracting the purchase price of the transaction.
Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 59,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008 and 2009 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007, 2008, and 2009, and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007, 2008 and 2009 by the readers of Business Insurance. For more information on Aon, log onto www.aon.com.