Aon Corporation is purchasing HR outsourcing business Hewitt Associates for just under $ 5 billion. The combined Aon Hewitt Division will provide many of the services Hewitt did before the merger. After a few years of transition, the combined company will probably save about $ 355 million each year.
Creating the Aon Hewitt division with a purchase
. Aon Corporation is paying about $ 50 per share for Hewitt Associates, about 41 percent more than current value. Hewitt stockholders will be paid $ 25.61 and .63 stocks in Aon. Aon offices and Hewitt offices will combine their administrative functions while maintaining separate businesses as Aon Hewitt. At the point the press release was sent out, Hewitt Associates stock went up, but Aon fell. This new company will be based in Illinois. There are no official estimates on how many jobs will be cut in this merger.
How Aon does business
Aon Corporation, among other things, works in “global risk management and insurance”. Aon offers clients advice on managing risk, along with insurance brokerage services. The company trades stock on the NYSE, and is classified as a financial business. About ten months ago, Aon spun off three separate insurance companies, cutting their balance sheets significantly.
How Hewitt Associates operates
Hewitt Associates works with human resources outsourcing. Hewitt offers HR management, benefits, and other administrative services. Consulting services also make up a small portion of Hewitt’s services. The Hewitt Associates business will provide commercial service and supply features to Aon’s general business. There has also been some Hewitt Associates restructuring in the recent past. In May of 2010, HRAdvance Inc. was purchased by Hewitt, at about the same time Latin American business operations were spun off into an entirely separate company.
