DUBLIN, June 3, 2021 /PRNewswire/ -- Aon plc (NYSE:
AON), a leading global professional services firm providing a broad
range of risk, retirement and health solutions, today announced the
firm has signed definitive agreements to sell its U.S. retirement
business to Aquiline and its Aon Retiree Health Exchange™ business
to Alight for total gross consideration of $1.4 billion.
The agreements are intended to address certain questions raised
by the U.S. Department of Justice in relation to the combination
with respect to the markets in which these businesses are active.
Aon and Willis Towers Watson
continue to work toward obtaining regulatory approval in all
relevant jurisdictions.
"These agreements further accelerate our momentum to close our
proposed combination with Willis Towers
Watson," said Greg Case,
Aon's CEO. "These are very capable teams that have demonstrated
exceptional dedication to our clients and our firm. I want to
recognize their contributions and reinforce that we are confident
they will have similar opportunities with Aquiline and Alight."
The proposed combination of Aon and Willis Towers Watson would build on the firm's
track record of progress on key financial metrics and achievement
over the past decade. As previously disclosed, the pending
combination with Willis Towers
Watson is expected to deliver:
- Revenue growth, margin expansion through the delivery of better
solutions, increased cash flow and earnings growth and a strong
balance sheet, to generate attractive returns for shareholders in
the future.
- $800 million of cost
synergies1, taking into account announced divestitures
and other potential remedies.
- Allocation of any divestiture proceeds according to its Return
on Invested Capital (ROIC) framework, in which the firm expects
that share buyback will continue to be its highest return
activity.
- Accretion to adjusted EPS, reflecting the synergy potential of
the combination, consistent with initially announced accretion
projections in year three and over the long
term.2,3
Aon and Willis Towers Watson have
previously announced the divestiture of Willis Re, a set of Willis Towers Watson corporate risk and broking
and health and benefits services, and Aon's retirement and
investment business in Germany.
Total 2020 revenue announced or offered to be divested, contingent
on the combination, is $2.3 billion.
Of the $2.3 billion, approximately
35% occurred in Q1, 23% in Q2, 18% in Q3, and 24% in Q4.
The U.S. retirement business Aquiline will acquire includes
approximately 1000 colleagues and the agreement includes U.S. core
retirement consulting, U.S. pension administration and the
U.S.-based portion of Aon's international retirement consulting
business, along with many solutions and tools, including:
- Benefit Index and SpecSelect
- Risk Analyzer
- DBCalc and YPR
- Aon Pooled Employer Plan (PEP)
The agreement with Aquiline does not include Aon's non-U.S.
actuarial, non-U.S. pension administration or international
retirement businesses based outside of the U.S.
Aquiline Capital Partners is a private investment firm based in
New York and London that invests in companies across
financial services, technology, business services, and healthcare.
With $6.4 billion in assets under
management, the firm has successfully invested in numerous
businesses that help people plan and save for retirement.
"The retirement solutions sector is benefitting from an
increased focus on long-term investment security and risk
management of plans," said Jeff
Greenberg, Aquiline's Chairman and CEO. "Aquiline's
significant experience across retirement and investments positions
us to build on the strong business Aon has created. We look forward
to working closely with the clients, management and colleagues of
Aon's U.S. retirement business to create further value for all
stakeholders."
The Aon Retiree Health Exchange™, which Alight will acquire, is
an individual market solution that better supports employers and
their retirees. It was the first retiree exchange to meet the
National Council on Aging (NCOA) standards and continues to meet or
exceed those rigorous standards of excellence in consumer education
and health insurance brokerage services for people with
Medicare.
Alight leverages its proprietary AI and data analytics to
optimize business process as a service (BPaaS) to deliver superior
outcomes for employees and employers across a comprehensive
portfolio of services. Alight allows employees to enrich their
health, wealth and work while enabling global organizations to
achieve a high-performance culture. Helping clients of all sizes,
including 70 percent of the Fortune 100, Alight's 15,000 colleagues
serve more than 30 million employees and family members.
All of the announced regulatory divestitures are contingent on
the completion of the pending Aon and Willis Towers Watson combination, as well as
other customary closing conditions. While Aon and WTW are working
toward completing the proposed combination as soon as possible in
the third quarter of 2021, the completion remains subject to the
receipt of required regulatory approvals and clearances, including
with respect to United States
antitrust laws, as well as other customary closing conditions.
About Aon
Aon plc (NYSE: AON) is a leading global
professional services firm providing a broad range of risk,
retirement and health solutions. Our 50,000 colleagues in 120
countries empower results for clients by using proprietary data and
analytics to deliver insights that reduce volatility and improve
performance.
Follow Aon on Twitter and LinkedIn
Stay up to date by visiting the Aon Newsroom and hear from Aon's
expert advisors in The One Brief.
Sign up for News Alerts here
About Aquiline
Aquiline Capital Partners, founded in
2005, is a private investment firm based in New York and London investing in businesses across
financial services and technology, business services, and
healthcare. The firm had $6.4 billion
in assets under management as of March 31,
2021. For more information about Aquiline, its investment
professionals, and its portfolio companies, please visit
https://www.aquiline.com/.
Media Contacts
Aon - mediainquiries@aon.com, +1 833
751 8114
Aquiline - Nick Theccanat, ntheccanat@prosek.com, +1 281
546 0526
Statements Required by the Irish Takeover Rules
The
directors of Aon accept responsibility for the information
contained in this announcement. To the best of the knowledge and
belief of the directors of Aon (who have taken all reasonable care
to ensure that such is the case), the information contained in this
announcement for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
No statement in this announcement is intended to constitute a
profit forecast for any period, nor should any statements be
interpreted to mean that earnings or earnings per share will
necessarily match or be greater or lesser than those for the
relevant preceding financial periods for Aon as appropriate. No
statement in this announcement constitutes an asset valuation.
Safe Harbor Statement
This communication contains
certain statements related to future results, or states Aon's
intentions, beliefs and expectations or predictions for the future
which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from either historical or anticipated results depending on a
variety of factors. These forward-looking statements include
information about possible or assumed future results of Aon's
operations, the uncertainty surrounding the COVID-19 pandemic,
Aon's pending combination with Willis Towers Watson Public Limited
Company (the "Combination"), and divestitures to be made in
connection with the Combination. All statements other than
statements of historical facts that address activities, events or
developments that Aon expects or anticipates may occur in the
future, including such things as its outlook, future capital
expenditures, growth in commissions and fees, changes to the
composition or level of its revenues, cash flow and liquidity,
expected tax rates, business strategies, competitive strengths,
goals, the benefits of new initiatives, growth of its business and
operations, plans, references to future successes, and expectations
with respect to the timing, closing and benefits of the
Combination, including divestitures made in connection with the
Combination, are forward-looking statements.
Also, when Aon uses words such as "anticipate", "believe",
"estimate", "expect", "intend", "plan", "probably", "potential",
"looking forward", or similar expressions, it is making
forward-looking statements. The following factors, among others,
could cause actual results to differ from those set forth in or
anticipated by the forward-looking statements: the possibility that
the Combination, or divestitures made in connection with the
Combination, will not be consummated in the expected timeframe, or
at all; failure to obtain necessary regulatory approvals, to comply
with the requirements related to such approvals, or to satisfy any
of the other conditions to the Combination or divestitures made in
connection with the Combination; general economic and political
conditions in different countries in which Aon does business around
the world, including the UK's withdrawal from the European Union;
changes in the competitive environment or damage to Aon's
reputation; fluctuations in exchange and interest rates that could
influence revenue and expenses; changes in global equity and fixed
income markets that could affect the return on invested assets;
changes in the funding status of Aon's various defined benefit
pension plans and the impact of any increased pension funding
resulting from those changes; the level of Aon's debt limiting
financial flexibility or increasing borrowing costs; rating agency
actions that could affect Aon's ability to borrow funds; volatility
in Aon's tax rate due to a variety of different factors, including
U.S. tax reform; changes in estimates or assumptions on Aon's
financial statements; limits on Aon's subsidiaries to make dividend
and other payments to Aon; the impact of lawsuits and other
contingent liabilities and loss contingencies arising from errors
and omissions and other claims against Aon; the impact of, and
potential challenges in complying with, legislation and regulation
in the jurisdictions in which Aon operates, particularly given the
global scope of Aon's businesses and the possibility of conflicting
regulatory requirements across jurisdictions in which Aon does
business; the impact of any investigations brought by regulatory
authorities in the U.S., Ireland,
the UK and other countries; the impact of any inquiries relating to
compliance with the U.S. Foreign Corrupt Practices Act and non-U.S.
anti-corruption laws and with U.S. and non-U.S. trade sanctions
regimes; failure to protect intellectual property rights or
allegations that Aon infringes on the intellectual property rights
of others; the effects of Irish law on Aon's operating flexibility
and the enforcement of judgments against Aon; the failure to retain
and attract qualified personnel, whether as a result of the
Combination, divestitures made in connection with the Combination
or otherwise; international risks associated with Aon's global
operations; the effects of natural or man-made disasters, including
the effects of COVID-19 and other health pandemics; the potential
of a system or network breach or disruption resulting in
operational interruption or improper disclosure of personal data;
Aon's ability to develop and implement new technology; the damage
to Aon's reputation among clients, markets or third parties; the
actions taken by third parties that perform aspects of Aon's
business operations and client services; the extent to which
Aon manages certain risks created in connection with the services,
including fiduciary and investments, consulting, and other advisory
services, among others, that Aon currently provides, or will
provide in the future, to clients; Aon's ability to continue, and
the costs and risks associated with, growing, developing and
integrating companies that it acquires or new lines of business;
changes in commercial property and casualty markets, commercial
premium rates or methods of compensation; changes in the health
care system or Aon's relationships with insurance carriers; Aon's
ability to implement initiatives intended to yield, and the ability
to achieve, cost savings; Aon's ability to realize the expected
benefits from its restructuring plan; adverse effects on the market
price of Aon's securities and/or operating results for any reason,
including, without limitation, because of a failure to consummate
the Combination or the divestitures made in connection with the
Combination; the failure to realize the expected benefits of the
Combination (including anticipated revenue and growth synergies) in
the expected timeframe, or at all; the failure to effectively
integrate the combined businesses following the Combination;
significant transaction and integration costs or difficulties in
connection with the Combination, or divestitures made in connection
with the Combination, and or unknown or inestimable liabilities;
litigation associated with the Combination; the potential impact of
the consummation of the Combination and divestures made in
connection with the Combination on relationships, including with
suppliers, customers, employees and regulators; and general
economic, business and political conditions (including any
epidemic, pandemic or disease outbreak, including COVID-19) that
affect the combined company following the consummation of the
Combination.
Any or all of Aon's forward-looking statements may turn out to
be inaccurate, and there are no guarantees about Aon's
performance. The factors identified above are not exhaustive.
Aon and its subsidiaries operate in a dynamic business environment
in which new risks may emerge frequently. Accordingly, you should
not place undue reliance on forward-looking statements, which speak
only as of the dates on which they are made. In addition, results
for the year ended December 31, 2020
and the quarter ended March 31, 2021
are not necessarily indicative of results that may be expected for
any future period, particularly in light of the continuing effects
of the COVID-19 pandemic. Further information concerning Aon and
its businesses, including factors that potentially could materially
affect Aon's financial results, is contained in Aon's filings with
the Securities and Exchange Commission (the "SEC"). See Aon's Annual Report on Form 10-K for the
year ended December 31, 2020 and its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 for a further discussion of these
and other risks and uncertainties applicable to Aon and its
businesses. These factors may be revised or supplemented in
subsequent reports filed with the SEC. Aon is not under, and
expressly disclaims, any obligation to update or alter any
forward-looking statement that it may make from time to time,
whether as a result of new information, future events or
otherwise.
____________________
|
1 There
are various material assumptions underlying the synergies, which
may result in the synergies and other cost reductions being
materially greater or less than estimated. The estimates should
therefore be read in conjunction with the bases and assumptions for
these synergy numbers, which are set out in Appendix I of the Rule
2.5 Announcement made on March 9th, 2020, along with the
reports accompanying such statements in Appendix 4 and Appendix 5
to the Rule 2.5 Announcement.
|
2 This
statement should not be construed as a profit forecast or
interpreted to mean that the profits or earnings of Aon will
necessarily match or be greater than or be less than those for the
relevant preceding financial period or any other period.
|
3
Statements in this announcement that the combination of Aon and
Willis Towers Watson is accretive to adjusted EPS should not be
interpreted to mean that Aon earnings per share in the current or
any future financial period will necessarily match or be greater
than or be less than those for the relevant preceding financial
period.
|
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SOURCE Aon plc