Benfield agrees to enter Aon’s fold

In a deal worth $1.75 billion, Aon
Corporation is to acquire Benfield Group, a move repressing notable
consolidation in the global reinsurance brokerage and risk
management industry. Benfield, which is UK-based and incorporated
in Bermuda, will add annual revenue of almost $1 billion to Aon’s
existing revenue base of about $7.5 billion.

In addition to a sizable revenue boost Aon believes Benfield will
add significantly to it capabilities in a number of areas. These
include Benfield’s global analytics, modelling and client facing
technology and its particularly strong position in Japan and other
Asian markets.

Upon successful conclusion of the deal, which already has the
support of shareholders representing a quarter of Benfield’s
outstanding shares, Aon intends to integrate the Benfield business
with its existing reinsurance operations, Aon Re Global, and
operate the division globally under a new brand, Aon Benfield Re.
It is intended that Benfield’s CEO Grahame Chilton will serve as
vice-chairman of Aon Group and report to the CEO of Aon
Corporation, Greg Case. Aon Re Global’s executive chairman Michael
O’Halleran and its CEO Andrew Appel will serve as executive
chairman and CEO, respectively, of Aon Benfield Re which will rank
as the world’s biggest reinsurance broker and serve the majority of
insurance and reinsurance carriers globally.

Aon intends funding the acquisition of Benfield out of cash
resources and anticipates closure of the deal by year-end.