In a deal worth almost $ 5 billion, consulting and insurance company Aon Corporation is buying HR outsourcing firm Hewitt Associates. The newly-formed Aon Hewitt division will function much like Hewitt Associates did before the purchase. After a few years of transition, the combined company will probably save about $ 355 million each year.
Source for this article – Aon Corporation purchases Hewitt Associates, creates Aon Hewitt by Personal Money Store
The Aon Hewitt purchase
The cost of purchasing Hewitt Associates will be about $ 3.9 billion, to be paid half in cash and half in stock from Aon. Hewitt is going to be getting over 40 percent more per share than they are currently trading with. Hewitt stockholders will be paid $ 25.61 and .63 stocks in Aon. Aon Hewitt will keep the same CEO while combining the back-office operations with Aon offices. Hewitt Associates stock rose while Aon stock fell on this news. Illinois will play host to the new company. This merger will result in the loss of some jobs, though neither company has released official estimates on how many.
How Aon does business
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. Just one year ago, in August of 2009, Aon Corporation shed three separate insurance companies from its business model.
The business that Hewitt Associates uses
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. Hewitt Associates has been through some major restructuring lately. Latin American operations have been spun off, and a company called HRAdvance Inc. was combined with Hewitt in May of 2010.
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