Aon Hewitt created by merger

In a deal worth almost $ 5 billion, consulting and insurance company Aon Corporation is buying HR outsourcing firm Hewitt Associates. The newly-formed Aon Hewitt division will function much like Hewitt Associates did before the purchase. After a few years of transition, the combined company will probably save about $ 355 million each year.

Source for this article – Aon Corporation purchases Hewitt Associates, creates Aon Hewitt by Personal Money Store

Hewitt Associates to be purchased by Aon

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 offices and Hewitt offices will combine their administrative functions while maintaining separate businesses as Aon Hewitt. Hewitt Associates stock rose while Aon stock fell on this news. The new Aon Hewitt company will be housed in Illinois. No word yet on how many employees of Aon or Hewitt may lose their jobs during this combination of business operations.

The business of Aon Corporation

Aon Corporation is a global “risk management and human capital consulting services” business. Clients of Aon get insurance brokerage services and advice. The company trades stock on the NYSE, and is classified as a financial business. Just one year ago, in August of 2009, Aon Corporation shed three separate insurance companies from its business model.

How Hewitt Associates operates

Hewitt Associates is a business that focuses on human resource outsourcing. Administrative services, including human resources, make up the bulk of Hewitt Associates’ business. Hewitt also provides some consulting services. Traded on the New York Stock Exchange, Hewitt is a “commercial service and supply” business. Hewitt Associates has been through some major restructuring lately. 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.