AON

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AON agrees to buy Britain's Benfield for $1.6BFriday August 22, 9:45 am ET

Insurance broker Aon agrees to buy British reinsurance company Benfield for about $1.6B LONDON (AP) -- Aon Corp., the world's biggest insurance broker, said 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 percent 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 percent 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 66 cents, or 1.4 percent, to $47.36 in morning trading Friday.