Aon Completes Acquisition of Benfield Group Limited
28 Novembre 2008 - 7:06PM
PR Newswire (US)
Aon Benfield Ready to Serve Clients on Day One, Offering
Unparalleled Talent, Innovation, Analytics, Insight and Advice
CHICAGO, Nov. 28 /PRNewswire-FirstCall/ -- Aon Corporation
(NYSE:AOC) today announced that it has completed its acquisition of
Benfield Group Limited, creating Aon Benfield - the world's
premiere reinsurance intermediary and capital advisor - which will
launch on December 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 Corporation. "We will
be ready for action on day one, and our entire team is totally
focused on continuing to deliver the best possible solutions for
our combined clients during these turbulent times," noted Andrew
Appel, chief executive officer of Aon Benfield. "Since announcing
our agreement, we have received strong support from colleagues and
clients alike at both Benfield and Aon. This enthusiasm is
recognition of the unparalleled set of capabilities we can now
deliver as the new Aon Benfield," said Grahame Chilton, vice
chairman of Aon Group and former chief executive officer of
Benfield. "I am excited about the prospect of working with Greg and
in the development of Aon globally. This deal is an
industry-changing event which will create new standards in what
intermediaries should be offering to clients." Michael O'Halleran,
executive chairman of Aon Benfield, added, "By combining the talent
and capabilities of Aon Re Global and Benfield Group, we are
creating a powerful global franchise capable of expanding and
redefining reinsurance and capital market solutions, as well as a
compelling opportunity for current and prospective clients." As
previously announced, the Benfield business will be combined with
Aon's existing and complementary reinsurance operations, creating
Aon Benfield, which is expected to benefit from: -- World-class
talent, including a team of more than 4,000 employees who can offer
clients an integrated set of risk management products and services,
including treaty and facultative reinsurance, innovative risk
capital management and related advisory services; -- 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; -- Industry leading analytics and
modeling, an increasingly differentiating factor in the global
market for reinsurance services; -- An expanded client base,
comprised of the majority of insurance and reinsurance carriers
globally; and -- Unparalleled market positioning, with the new Aon
Benfield being the world leader in treaty, in facultative and the
leading broker in capital markets transactions. Terms of the
Agreement and Final Purchase Price Pursuant to the terms of the
previously disclosed Implementation Agreement between Aon and
Benfield and the related announcement issued by Aon and Benfield,
both dated August 22, 2008, Aon has completed its acquisition of
the share capital of Benfield Group Limited for 3.50 British pounds
per common share and 2.80 British pounds per preference share, in
each case in cash and the assumption of 91 million British pounds
of Benfield net debt, representing an enterprise value of
approximately 935 million British pounds on a fully diluted basis.
Effective today at 8:00 a.m. London time, Benfield Group common
shares were cancelled from the official list of the UK Financial
Service Authority. As of the acquisition's initial announcement on
August 22, the total required U.S. Dollar consideration was
estimated at $1.75 billion. In order to hedge the acquisition's
foreign currency transaction exposure, Aon entered into currency
options to purchase British pounds at a fixed exchange rate,
enabling Aon to benefit from U.S. Dollar strength. As of November
25, 2008, the required U.S. Dollar consideration to close the
acquisition was estimated at $1.43 billion. This estimation of the
U.S. Dollar consideration represents an approximate $320 million
improvement to the previously announced purchase price, before
premium costs associated with implementing the hedging program. As
part of the hedging program, Aon previously expensed $6 million of
costs in the third quarter and expects to record the remaining $44
million of costs required to complete the hedging program during
the fourth quarter. Aon Benfield Restructuring Plan In connection
with the acquisition, Aon announces 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. An estimated 500 to 700 positions, predominantly non- client
facing roles, are expected to be eliminated as part of the 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. All of the components of the restructuring plan are not
finalized and actual savings, total costs and timing may vary from
those estimated due to changes in the scope or underlying
assumptions of the plan. Amounts stated in US dollars have been
converted to British pounds based on USD$1.00 = 0.6466 British
pounds. About Aon Benfield Aon Benfield is the world's premier
reinsurance intermediary and capital advisor, providing clients
with integrated capital solutions and services. The company offers
clients access to every traditional and alternative market in the
world, through an international network of offices spanning over 50
countries and more than 4,000 professionals. Its worldwide client
base is able to access the broadest portfolio of integrated capital
solutions and services, world-class talent, unparalleled global
reach and local expertise to best meet their business objectives.
Aon Benfield is the industry leader in treaty, facultative and
capital markets transactions. About Aon Aon Corporation is the
leading global provider of risk management services, insurance and
reinsurance brokerage, human capital and management consulting.
Through its 36,000 colleagues worldwide, Aon readily delivers
distinctive client value via innovative and effective risk
management and workforce productivity solutions. Our
industry-leading global resources, technical expertise and industry
knowledge are delivered locally through more than 500 offices in
more than 120 countries. Aon was named the world's best broker by
Euromoney magazine's 2008 Insurance Survey. In 2008, Aon ranked
highest on the Business Insurance ranking of the world's largest
insurance brokers based on commercial retail, wholesale,
reinsurance and personal lines brokerage revenues. Aon also was
ranked by A.M. Best as the number one global insurance brokerage in
2007 and 2008 based on brokerage revenues, and voted best insurance
intermediary, best reinsurance intermediary and best employee
benefits consulting firm in 2007 and 2008 by the readers of
Business Insurance. For more information on Aon, log onto
http://www.aon.com/. Safe Harbor Statement This press release
contains certain statements related to future results, or states
our intentions, beliefs and expectations or predictions for the
future which are forward-looking statements as that term is defined
in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from either historical or anticipated results depending on a
variety of factors. Potential factors that could impact results
include: general economic conditions in different countries in
which we do business around the world, changes in global equity and
fixed income markets that could affect the return on invested
assets, fluctuations in exchange and interest rates that could
influence revenue and expense, rating agency actions that could
affect our ability to borrow funds, funding of our various pension
plans, changes in the competitive environment, our ability to
implement restructuring initiatives and other initiatives intended
to yield cost savings, changes in commercial property and casualty
markets and commercial premium rates that could impact revenues,
the outcome of inquiries from regulators and investigations related
to compliance with the U.S. Foreign Corrupt Practices Act and
non-U.S. anti-corruption laws, the impact of investigations brought
by U.S. state attorneys general, U.S. state insurance regulators,
U.S. federal prosecutors, U.S. federal regulators, and regulatory
authorities in the U.K. and other countries, the impact of class
actions and individual lawsuits including client class actions,
securities class actions, derivative actions, ERISA class actions,
the cost of resolution of other contingent liabilities and loss
contingencies, our ability to integrate Benfield Group Limited
successfully and to realize the anticipated benefits of the
Benfield acquisition. Further information concerning Aon
Corporation and its business, including factors that potentially
could materially affect its financial results, is contained in its
filings with the Securities and Exchange Commission. Contacts
Investors Scott Malchow Vice President, Investor Relations
T:+1-312-381-3983 Media David Prosperi Vice President, Global
Public Relations T:+1-312-381-2485 DATASOURCE: Aon Corporation
CONTACT: Investors, Scott Malchow, Vice President, Investor
Relations, +1-312-381-3983, or Media, David Prosperi, Vice
President, Global Public Relations, +1-312-381-2485, both of Aon
Corporation Web site: http://www.aon.com/
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