Aon agrees to buy Britain's Benfield for $1.6 bn
Aon Corp, the world's biggest insurance broker, said on Friday it has agreed to buy Britain's Benfield Group Ltd. for almost $1.6 billion in cash.
By Agencies |
LONDON: Aon Corp, the world's biggest insurance broker, said on Friday it has agreed to buy Britain's Benfield Group Ltd. for almost $1.6 billion in cash.
Chicago-based Aon said combining Benfield, a leading independent reinsurance intermediary, with its existing reinsurance operations would create a global, diverse franchise.
Under the deal, Aon will pay 3.50 pounds ($6.55) per share in cash for each Benfield share, a 29 per cent premium over Benfield's closing price Thursday.
It will also assume 91 million pounds ($170 million) of Benfield net debt in the deal, boosting the overall value of the transaction to about 935 million pounds ($1.75 billion).
Benfield's share price shot up 30 per cent after the announcement, pushing the stock to 352.75 pence ($6.56) midmorning and above the offered price.
``The acquisition is expected to enhance Aon's capabilities in the significant Florida and South East US property-catastrophe markets as well as in the rapidly growing Asia-Pacific and Latin American regions,'' the companies said in a statement to the London Stock Exchange.
``In addition, the combination offers the opportunity to capitalize on the significant investment both businesses have made in risk modeling and analytics to create a global market leading capability in this key area,'' they added.
Aon said it will fund the acquisition with existing cash resources.
Aon shares rose $1.22, or 2.6 per cent, to $47.92 on Friday.
Chicago-based Aon said combining Benfield, a leading independent reinsurance intermediary, with its existing reinsurance operations would create a global, diverse franchise.
Under the deal, Aon will pay 3.50 pounds ($6.55) per share in cash for each Benfield share, a 29 per cent premium over Benfield's closing price Thursday.
It will also assume 91 million pounds ($170 million) of Benfield net debt in the deal, boosting the overall value of the transaction to about 935 million pounds ($1.75 billion).
Benfield's share price shot up 30 per cent after the announcement, pushing the stock to 352.75 pence ($6.56) midmorning and above the offered price.
``The acquisition is expected to enhance Aon's capabilities in the significant Florida and South East US property-catastrophe markets as well as in the rapidly growing Asia-Pacific and Latin American regions,'' the companies said in a statement to the London Stock Exchange.
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``In addition, the combination offers the opportunity to capitalize on the significant investment both businesses have made in risk modeling and analytics to create a global market leading capability in this key area,'' they added.
Aon said it will fund the acquisition with existing cash resources.
Aon shares rose $1.22, or 2.6 per cent, to $47.92 on Friday.
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