Aon to acquire Benfield

Aon Corporation has announced it will acquire Benfield Group Limited.
Under the agreement, Aon will acquire Benfield for 3.50 (Cdn$6.79) per share in cash and assume 91 million (Cdn$176.43 million) of Benfield net debt, representing an enterprise value of approximately 935 million (Cdn$1.81 billion) on a fully diluted basis, the company notes in a release.
Aon intends to integrate the Benfield business with its existing reinsurance operations and operate the division globally under the newly created Aon Benfield brand, upon the transaction’s closing.
The transaction is expected to generate approximately 65 million (Cdn$126 million) in annual cost savings fully phased-in in 2011, an Aon release says. The savings will come primarily from shared administrative and support services across both Aon Re Global and Benfield, it adds.
“This agreement reflects our ongoing efforts to ensure that Aon’s colleagues, capabilities and technology remain at the forefront of our industry and that we provide the best value for our clients,” Greg Case, president and CEO of Aon Corporation, said in the release. “Over the past several years, we have made significant progress in strengthening Aon’s operational platform and global network, becoming a more client-focused organization with a broader portfolio of innovative products and services. With Aon Benfield Re, we will build on this progress to further enhance organic growth, expand margins, and drive shareholder value.”