Aon Corp. has completed its $1.43 billion acquisition of Benfield Group Limited, creating Aon Benfield, reinsurance intermediary and capital advisor, which will launch on Dec. 1.
“The completion of this transaction marks an important milestone in the history of our firm and a new era of leadership for the global reinsurance industry,” said Greg Case, president and chief executive officer of Aon Corp.
As previously announced, the Benfield business will be combined with Aon’s existing reinsurance operations, creating Aon Benfield, which is expected to benefit from a team of more than 4,000 employees who can offer clients risk management products and services, including treaty and facultative reinsurance, risk capital management and related advisory services.
The company said that an estimated 500 to 700 positions in predominantly non- client facing roles are expected to be eliminated as part of a restructuring plan following the merger.
Company officials said the merger will mean enhanced scale and scope, including complementary books of business with minimal overlap in core U.S. and U.K. markets, and in developing markets targeted for growth, such as Asia, Central and Eastern Europe, Africa and Latin America.
Aon announced a global restructuring plan intended to integrate and streamline operations across the combined Aon Benfield organization. The restructuring plan is expected to result in cumulative costs of approximately $185 million (approximately 120 million British pounds) over a three-year period, encompassing workforce reduction, lease consolidation, asset impairment and other costs associated with the restructuring plan.
The restructuring plan, before any potential reinvestment of savings, is expected to deliver approximately $33-41 million (approximately 21-27 million British pounds) of savings in 2009, approximately $84-94 million (approximately 54-61 million British pounds) of savings in 2010 and approximately $122 million (approximately 79 million British pounds) of annualized savings in 2011.
Source: Aon Benfield