Aon’s Acquisition Of Benfield Casts Huge Global Net

Global insurance broker Aon Corporation is acquiring reinsurance broker Benfield Group Ltd. in a cash offer worth Cdn $1.6 billion.

The transaction, agreed upon unanimously following much negotiations between the two boards of directors, positions Aon to grow its market share in targeted regions such as Asia, Central and Eastern Europe, Africa and Latin America, where Benfield is already established.

It is also viewed as a money-saving measure and is indicative of an ongoing trend towards consolidations that is leaving smaller brokerages struggling.

U.K.-based Benfield specializes in reinsurance and risk intermediary services and Aon intends to integrate iots business into its existing reinsurance operations through Aon Re Global. It will operate the division globally under a new brand called Aon Benfield Re.  

“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 says in announcing the deal.  “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.”

Case continues, “Aon and Benfield share a common focus on excellence in client service, and both recognize the importance of being the destination of choice for the best talent in our industry.  The strong cultural fit between our firms will enable us to quickly realize the benefits of this transaction, and the value added for our clients and shareholders, in a seamless fashion following the close of our transaction.”

Grahame Chilton, CEO of Benfield, adds, “We are excited by this unique opportunity to create a powerful global franchise capable of expanding and redefining innovative reinsurance and capital market solutions.  At the same time, the Benfield board believes that the offer provides Benfield’s shareholders with fair and certain value.  We look forward to joining the Aon team and working with them as Aon Benfield Re to expand our joint expertise and local reach to customers around the world.”

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