UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of report (Date of
earliest event reported):
July 11,
2010
Aon
Corporation
(Exact Name of Registrant as
Specified in Charter)
Delaware
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1-7933
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36-3051915
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(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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200 East Randolph Street, Chicago, Illinois
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60601
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone
number, including area code:
(312)
381-1000
Not
Applicable
(Former Name or Former
Address, if Changed Since Last Report)
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (
see
General Instruction A.2. below):
x
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
Agreement
and Plan of Merger
On
July 11, 2010, Aon Corporation, a Delaware corporation (Aon), entered
into an Agreement and Plan of Merger (the Merger Agreement) with Hewitt
Associates, Inc., a Delaware corporation (Hewitt), Alps Merger Corp., a
Delaware corporation and wholly owned subsidiary of Aon (Merger Sub), and
Alps Merger LLC, a Delaware limited liability company and wholly owned
subsidiary of Aon (Merger LLC). The
Merger Agreement provides, among other things, that, upon the terms and subject
to the conditions set forth in the Merger Agreement, (i) Merger Sub will
merge with and into Hewitt, with Hewitt surviving as a wholly owned subsidiary
of Aon (the Merger), and (ii) following the completion of the Merger,
the surviving corporation from the Merger will merge with and into Merger LLC
(the Subsequent Merger), with Merger LLC surviving the Subsequent Merger and
continuing as a wholly owned subsidiary of Aon.
Subject
to the terms and conditions of the Merger Agreement, which has been approved
and adopted by the boards of directors of each of Aon and Hewitt, at the
effective time of the Merger (the Effective Time),
each share of Class A common stock, par value $0.01
per share, of Hewitt (Hewitt Common Stock) outstanding immediately prior to
the Effective Time will convert into, at the election of each of the holders of
Hewitt Common Stock, (i) 0.6362 of a share of common stock, par value
$1.00 per share, of Aon (Aon Common Stock), and $25.61 in cash (the Mixed
Consideration), (ii) an amount of cash (the Cash Consideration) equal
to the sum of (a) $25.61 and (b) the product obtained by multiplying
0.6362 by the Closing Volume-Weighted Average Price (as defined in the Merger
Agreement), or (iii) a number of shares of Aon Common Stock (the Stock
Consideration) equal to the sum of (a) 0.6362 and (b) the quotient
obtained by dividing $25.61 by the Closing Volume-Weighted Average Price (the
Exchange Ratio). Holders of Hewitt
Common Stock who do not make an election will receive the Mixed
Consideration. The consideration to be
paid to holders of Hewitt Common Stock electing to receive the Cash
Consideration or the Stock Consideration in connection with the Merger is
subject, pursuant to the terms of the Merger Agreement, to automatic
adjustment, as applicable, to ensure that the amount of cash paid and the
number of shares of Aon Common Stock issued by Aon in the Merger each
represents approximately 50% of the aggregate merger consideration (taking into
account the roll-over of Hewitt options, as described below). No fractional shares of Aon Common Stock will
be issued in the Merger, and holders of Hewitt Common Stock will receive cash
in lieu of any fractional shares of Aon Common Stock.
In
connection with the Merger, each outstanding unvested Hewitt stock option will
fully vest, and, pursuant to the Merger Agreement, at the Effective Time, each
outstanding Hewitt stock option will be converted into an option to purchase
Aon Common Stock, with the same terms and conditions (but taking into account
any changes, including any acceleration or vesting of such option, by reason of
the Merger), with adjustments to reflect the Exchange Ratio. Shares of Hewitt restricted stock will vest
and be converted into the Mixed Consideration, and restricted stock units of
Hewitt and performance share units of Hewitt will be settled in Hewitt common
stock and then converted into the Mixed Consideration.
The
closing of the Merger is subject to certain conditions, including, among
others, (i) approval and adoption by Hewitt stockholders of the Merger
Agreement, (ii) approval by Aon stockholders of the issuance of Aon Common
Stock in connection with the Merger, (iii) the
2
expiration
or termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act and certain approvals by foreign governmental entities, (iv) no
court order prohibiting the transactions contemplated by the Merger Agreement,
(v) receipt of tax opinions from counsel to each of Aon and Hewitt with
respect to the treatment of the Merger and Subsequent Merger from a tax
perspective, (vi) no exercise of appraisal rights by more than 12.5% of
Hewitt stockholders and (vii) subject to materiality exceptions, the
accuracy of the representations and warranties made by Aon, Merger Sub and
Merger LLC, on the one hand, and Hewitt, on the other hand, and compliance by
Aon, Merger Sub, Merger LLC and Hewitt with their respective obligations under
the Merger Agreement.
Each
of Aon and Hewitt has made representations and warranties in the Merger
Agreement. Hewitt has agreed to certain
covenants and agreements, including, among others, (i) to conduct its
business in the ordinary course of business during the period between the
execution of the Merger Agreement and the closing of the Merger, (ii) not
to solicit alternate transactions and (iii) to call and hold a special
stockholders meeting and recommend adoption of the Merger Agreement. Aon has also agreed to various covenants and
agreements, including, among other things, (i) to conduct its business in
the ordinary course of business during the period between the execution of the
Merger Agreement and the closing of the Merger and (ii) to call and hold a
special stockholders meeting to approve the issuance of Aon Common Stock in
connection with the Merger.
The
Merger Agreement contains specified termination rights for both Aon and
Hewitt. If the Merger Agreement is
terminated under certain specified circumstances, Hewitt must pay Aon a
termination fee of $85 million or $190 million, as applicable. If the Merger Agreement is terminated under
certain other specified circumstances, Aon must pay Hewitt a termination fee of
$190 million or, if the Merger Agreement is terminated under certain specified
circumstances relating to Aons failure to obtain the requisite financing for
the Merger, a termination fee of $225 million.
The
Merger and the Subsequent Merger, considered together as a single integrated
transaction for United States federal income tax purposes along with the other
transactions effected pursuant to the Merger Agreement, are intended to qualify
as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended.
The
Merger Agreement also provides that, at the Effective Time, the board of
directors of Aon will consist of the fourteen current Aon directors and two
directors mutually agreed upon by Aon and Hewitt.
The
foregoing summary of the Merger Agreement and the transactions contemplated
thereby contained in this Item 1.01 does not purport to be a complete
description and is qualified in its entirety by reference to the terms and
conditions of the Merger Agreement, a copy of which is attached as Exhibit 2.1
and incorporated herein by reference.
The
Merger Agreement has been included in this communication to provide investors
and stockholders with information regarding its terms. It is not intended to provide any other
factual information about Aon, Merger Sub, Merger LLC or Hewitt. The representations, warranties and covenants
contained in the Merger Agreement were made only for purposes of that agreement
and as of specific dates, were solely for the benefit of the parties to the
Merger
3
Agreement,
may be subject to limitations agreed upon by the contracting parties, including
being qualified by confidential disclosures made for the purposes of allocating
contractual risk between the parties to the Merger Agreement instead of
establishing these matters as facts, and may be subject to standards of
materiality applicable to the contracting parties that differ from those
applicable to investors. Investors are
not third-party beneficiaries under the Merger Agreement and should not rely on
the representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of Aon, Merger Sub,
Merger LLC or Hewitt or any of their respective subsidiaries or
affiliates. Moreover, information
concerning the subject matter of the representations and warranties may change
after the date of the Merger Agreement, which subsequent information may or may
not be fully reflected in Aons or Hewitts public disclosures.
Debt
Commitment Letter
Concurrently,
and in connection with entering into the Merger Agreement, Aon entered into a
commitment letter (the Debt Commitment Letter) with Credit Suisse AG, Cayman
Islands Branch (Credit Suisse), Credit Suisse Securities (USA) LLC (CS
Securities) and Morgan Stanley Senior Funding, Inc. (Morgan Stanley)
pursuant to which, subject to the conditions set forth therein, Credit Suisse
and Morgan Stanley committed to provide an unsecured term loan financing of up
to $1.0 billion (the Term Loan Facility) and an unsecured bridge financing of
up to $1.5 billion (the Bridge Facility and, together with the Term Loan
Facility, the Facilities). Aon has the
option to issue up to $1.5 billion in senior notes in lieu of all or a portion
of the drawing under the Bridge Facility or to refinance all or a portion of
the Bridge Facility at a later date. The proceeds from these borrowings or
issuances will be used by Aon to pay a portion of the cash consideration to be
paid in the Merger, to refinance existing indebtedness of Hewitt and its
subsidiaries and to pay related fees and expenses. Pursuant to the Debt Commitment Letter, CS
Securities and Morgan Stanley will act as joint lead arrangers and bookrunners
for each of the Facilities, Credit Suisse, acting through one or more of its
branches or affiliates, will act as administrative agent for each of the
Facilities, and Morgan Stanley will act as syndication agent for each of the
Facilities. The Term Loan Facility will
mature three years following the Effective Time, and the Bridge Facility will
mature 364 days following the Effective Time.
The Debt Commitment Letter provides, among other things, that the
closings of the Term Loan Facility and the Bridge Facility are subject to
certain conditions.
The
foregoing summary of the Debt Commitment Letter and the transactions
contemplated thereby contained in this Item 1.01 does not purport to be a
complete description and is qualified in its entirety by reference to the terms
and conditions of the Debt Commitment Letter, a copy of which is attached as
Exhibit 10.1 and incorporated herein by reference.
Safe
Harbor Statement
This communication contains certain
statements related to future results, or states our 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. Potential
factors that could impact results include: the possibility that the expected
efficiencies and cost savings from the proposed transaction will not be
realized, or will not be
4
realized within the expected time
period; the ability to obtain governmental approvals of the merger on the
proposed terms and schedule contemplated by the parties; the failure of
stockholders of Hewitt to approve the proposed merger; the failure of the
stockholders of Aon to approve the issuance of Aon Common Stock to Hewitt
stockholders; the risk that the Aon and Hewitt businesses will not be
integrated successfully; disruption from the proposed transaction making it
more difficult to maintain business and operational relationships; the
possibility that the proposed transaction does not close, including, but not
limited to, due to the failure to satisfy the closing conditions; general
economic conditions in different countries in which Aon and Hewitt do business
around the world; changes in global equity and fixed income markets that could
affect the return on invested assets; fluctuations in exchange and interest
rates that could influence revenue and expense; rating agency actions that
could affect Aons ability to borrow funds; funding of Aons various pension
plans; changes in the competitive environment; changes in commercial property
and casualty markets and commercial premium rates that could impact revenues;
the outcome of inquiries from regulators and investigations related to
compliance with the U.S. Foreign Corrupt Practices Act and non-U.S. anti-corruption
laws; the impact of investigations brought by U.S. state attorneys general,
U.S. state insurance regulators, U.S. federal prosecutors, U.S. federal
regulators, and regulatory authorities in the U.K. and other countries; the
impact of class actions and individual lawsuits including client class actions,
securities class actions, derivative actions and ERISA class actions; the cost
of resolution of other contingent liabilities and loss contingencies; and the
ability to realize the anticipated benefits to Aon of the Benfield
merger. Further information concerning Aon, Hewitt, and their business,
including factors that potentially could materially affect Aons and Hewitts
financial results, is contained in Aons and Hewitts filings with the Securities
and Exchange Commission (the SEC). See
Aons and Hewitts Annual Reports on Form 10-K and Annual Reports to
Stockholders for the fiscal years ended December 31, 2009 and September 30,
2009, respectively, and other public filings with the SEC for a further
discussion of these and other risks and uncertainties applicable to our
businesses. Neither Aon nor Hewitt undertakes, and each of them expressly
disclaims, any duty to update any forward-looking statement whether as a result
of new information, future events or changes in their respective expectations,
except as required by law.
Additional Information
This
communication does not constitute an offer to sell or the solicitation of an
offer to buy our securities or the solicitation of any vote or approval. This communication is being made in respect
of the proposed transaction involving Aon and Hewitt. In connection with the proposed transaction,
Aon and Hewitt will be filing documents with the SEC, including the filing by
Aon of a registration statement on Form S-4, and Aon and Hewitt intend to
mail a joint proxy statement regarding the proposed Merger to their respective
stockholders that will also constitute a prospectus of Aon. Before making any
voting or investment decision, investors and stockholders are urged to read
carefully in their entirety the joint proxy statement/prospectus regarding the
proposed transaction and any other relevant documents filed by either Aon or
Hewitt with the SEC when they become available because they will contain important
information about the proposed transaction.
You may obtain copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SECs website (
www.sec.gov
),
by accessing Aons website at
www.aon.com
under the heading Investor Relations and then under
5
the
link SEC Filings and from Aon by directing a request to Aon at Aon
Corporation, 200 E. Randolph Street, Chicago, Illinois 60601, Attention:
Investor Relations, and by accessing Hewitts website at
www.hewittassociates.com
under the heading Investor Relations and then under the link Reports &
SEC Filings and from Hewitt by directing a request to Hewitt at Hewitt
Associates, Inc., 100 Half Day Road, Lincolnshire, Illinois 60069,
Attention: Investor Relations.
Aon
and Hewitt and their respective directors and executive officers and certain
other members of management and employees may be deemed to be participants in
the solicitation of proxies in respect of the proposed transaction. You can
find information about Aons directors and executive officers in its definitive
proxy statement filed with the SEC on April 7, 2010. You can find
information about Hewitts directors and executive officers in its definitive
proxy statement filed with the SEC on December 16, 2009. Other information
regarding the participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise, will be
contained in the joint proxy statement/prospectus and other relevant materials
to be filed with the SEC when they become available. You can obtain free copies
of these documents from Aon and Hewitt using the contact information above.
6
Item 9.01.
Financial Statements and Exhibits.
(a)(c) Not
applicable.
(d) Exhibits:
Exhibit
Number
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Description of Exhibit
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2.1
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Agreement
and Plan of Merger, dated as of July 11, 2010, among Aon, Alps Merger
Corp., Alps Merger LLC and Hewitt.
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10.1
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Debt
Commitment Letter, dated as of July 11, 2010, among Aon, Credit Suisse
Securities (USA) LLC, Credit Suisse AG, Cayman Islands Branch and Morgan
Stanley Senior Funding, Inc.
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7
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
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Aon CORPORATION
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By:
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/s/ Gregory
C. Case
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Gregory
C. Case
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President and Chief Executive Officer
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Date:
July 12, 2010
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8
EXHIBIT INDEX
Exhibit
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Number
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Description of Exhibit
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2.1
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Agreement
and Plan of Merger, dated as of July 11, 2010, among Aon, Alps Merger
Corp., Alps Merger LLC and Hewitt.
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10.1
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Debt Commitment Letter, dated as
of July 11, 2010, among Aon, Credit Suisse Securities (USA) LLC, Credit
Suisse AG, Cayman Islands Branch and Morgan Stanley Senior Funding, Inc.
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9
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