Aon Corporation is purchasing HR outsourcing business Hewitt Associates for just under $ 5 billion. To complete the merger, Aon is creating an Aon Hewitt Division that will operate much like Hewitt did before. The companies estimate that this merger will eventually save the companies $ 355 million each year.
Article source – Aon Corporation purchases Hewitt Associates, creates Aon Hewitt by Personal Money Store
Creating the Aon Hewitt division with a purchase
The cost of purchasing Hewitt Associates will be about $ 3.9 billion, to be paid half in cash and half in stock from Aon. Aon is paying 41 percent more per share than Hewitt Associates is currently trading for. Aon will pay current Hewitt stockholders .63 Aon stocks and $ 25.61 per Hewitt stock. Aon offices and Hewitt offices will combine their administrative functions while maintaining separate businesses as Aon Hewitt. After news of this purchase, Hewitt Associates stock jumped, while Aon stock fell on Monday morning. Illinois will play host to the new company. There are no official estimates on how many jobs will be cut in this merger.
The business of Aon Corporation
Aon Corporation, among other things, works in “global risk management and insurance”. The company offers advice and insurance brokering services to clients. Classified as a financial business, Aon is traded on the NYSE. About ten months ago, Aon spun off three separate insurance companies, cutting their balance sheets significantly.
Hewitt Associates’ business
Hewitt Associates works with human resources 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. Latin American operations have been spun off, and a company called HRAdvance Inc. was combined with Hewitt in May of 2010.
No comments:
Post a Comment