Aon Corp. has agreed to buy human resource consulting firm Hewitt Associates in a deal worth $4.9 billion.
Aon intends to integrate Hewitt with its existing consulting and outsourcing operations, Aon Consulting, and operate the segment globally under the newly created Aon Hewitt brand. Russ Fradin, chairman and chief executive officer of Hewitt, will serve as chairman and chief executive officer of Aon Hewitt, reporting to Greg Case, chief executive officer, Aon Corp.
The aggregate consideration is valued at $50 per Hewitt share, which represents a 41 premium to Hewitt’s closing stock price on July 9, 2010, the last trading day prior to the announcement of the agreement. The aggregate fully diluted equity value of the transaction is approximately $4.9 billion, consisting of 50 percent cash and 50 percent Aon stock (based on the closing price of Aon common stock on July 9, 2010).
Hewitt is one of the world’s largest HR consulting and outsourcing companies, with more than 3,000 clients in three primary business lines: consulting, benefits outsourcing and HR business process outsourcing.
Aon said believes the combination of Aon and Hewitt creates a global leader in human capital solutions, benefiting clients, associates and stockholders in several ways. The combined Aon Hewitt will have revenues of $4.3 billion and 29,000 associates globally. Combined revenues for fiscal year 2009 consist of 49 percent from consulting services, 40 percent from benefits outsourcing and 11 percent from HR business process outsourcing.