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 Hewitt will keep the same CEO and business model as Hewitt Associates while combining back-office operations with Aon. After news of this purchase, Hewitt Associates stock jumped, while Aon stock fell on Monday morning. This new company will be based in Illinois. There are no official estimates on how many jobs will be cut in this merger.
Aon Corporation’s business practices
Aon Corporation is a global “risk management and human capital consulting services” business. Clients of Aon get insurance brokerage services and advice. The company is traded on the New York Stock Exchange and is classified as a financial business. Aon Corporation actually split three separate insurance businesses off of their operations just in August of last year.
How Hewitt Associates operates
Hewitt Associates is a business that focuses on human resource outsourcing. Hewitt offers HR management, benefits, and other administrative services. Hewitt also provides some consulting services. Traded on the New York Stock Exchange, Hewitt is a “commercial service and supply” business. There has been some major restructuring within Hewitt Associates as well. 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.
