Aon Hewitt created by merger

Aon Corporation is purchasing HR outsourcing business Hewitt Associates for just under $ 5 billion. To complete the merger, Aon is creating an Aon Hewitt Division that will operate much like Hewitt did before. The companies estimate that this merger will eventually save the companies $ 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. Aon Corporation is paying about $ 50 per share for Hewitt Associates, about 41 percent more than current value. Aon will pay current Hewitt stockholders .63 Aon stocks and $ 25.61 per Hewitt stock. 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.

The business Aon works in

Aon Corporation, among other things, works in “global risk management and insurance”. The company offers advice and insurance brokering services to clients. Classified as a financial business, Aon is traded on the NYSE. 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

The major portion of Hewitt Associates’ business is human resources outsourcing. Administrative services, including human resources, make up the bulk of Hewitt Associates’ business. Hewitt also provides some consulting services. The Hewitt Associates business will provide commercial service and supply features to Aon’s general 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.