Filed by Aon
Corporation
Pursuant to Rule 425 under the Securities Act of
1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Hewitt Associates, Inc.
Commission File No.: 001-31351
Commission File No. for Registration Statement
on Form S-4: 333-168320
This document was posted by Aon Corporation on its
integration portal accessible on its internal website on August 20, 2010.
Aon
Hewitt Merger Client Briefing: Week of August 16, 2010
Guidance for Client-facing Associates/Colleagues
Our
number one goal during the integration period is to remain focused on our
clients. While you have likely been in regular contact with your clients since
the announcement on July 12, we want to make sure you have a specific
contact plan to keep them informed of the latest developments related to the
Aon Hewitt combination. If we dont shape the messages to our clients, someone
else will.
Were
now creating a set of talking points for you to use on a regular basis. As
always, please tailor the messages to your clients and what you believe is
their interest level, but maintain regular, frequent contact.
At
least until the close of the merger, you can expect a new set of talking points
on a bi-weekly basis to help you with new messages/content for your client
discussions. Well send these materials to you directly and also post them on
our new shared integration portal accessible on the Knowledge Exchange (KE) at
Aon or The Source at Hewitt.
In this Edition
·
General merger messages
·
Quick Aon and Hewitt
business updates
·
Integration news:
·
Stockholder meeting date
announced
·
Integration teams identified
for both client-facing and non-client-facing workstreams
·
Synergy target
prioritization (clients first, prioritize product/business investments)
·
Upcoming leadership
announcements
For Your Client Discussions: Client Talking Points
·
Its been a busy month since
we announced our plans to bring together Aon and Hewitt.
·
Both firms are energized
about the new capabilities well be able to bring to clients as a combined
organization.
·
Despite all the work going
on behind the scenes to ensure a smooth integration, our client teams have
maintained 100% focus on serving clients. And were proud of that.
·
The merger of Aon and Hewitt
will create a global leader in human capital solutions with the following
strengths:
·
Combined Aon Hewitt revenues of $4.3 billion and
29,000 associates globally, with reach into the 120 countries where Aon does
business today;
·
A leading global brand and
client service that is recognized worldwide;
·
Complementary product and
service portfolio across consulting, benefits outsourcing and HR business
process outsourcing to meet the full spectrum of our clients human capital
needs; and
·
Diversified presence across
large corporate and middle market globally.
·
Because of these strengths,
were excited that Aon Hewitt will be able to provide clients with the leading
solutions to their most pressing human capital issues.
·
I wanted to provide you with
some quick updates on each of our businesses as well as the latest news related
to the integration.
1
·
As you know, both Aon and
Hewitt continue to operate independently during this transition period until
the deal formally closes, which we expect by November.
Business Updates
·
We have very strong
businesses as the foundation for this combination, which gives us a great
jumping-off point for integration.
·
Both organizations recently
posted quarterly results showing bottom-line strength and expected trends in
top-line growth.
·
Most importantly, both Aon
and Hewitt are healthy organizations that are poised for growth.
Additional Detail: Aon Business Updates
·
Aon reported Q2 earnings on July 30.
·
Overall, Aons results reflect continued progress and
momentum.
·
Total revenue increased 1% to $1.9 billion due to a 2%
increase from acquisitions.
·
EPS from continuing operations increased 7% to $0.81.
·
Consulting revenue increased 6% to $317 million, with
an increase in organic revenue of 2%. This was highlighted by strong growth in
international health and benefits brokerage and global compensation consulting.
Expectations for continued modest growth are driven by an encouraging pipeline
in compensation consulting, an increase in discretionary-related work, and new
services such as dependent eligibility audits and corporate transactions
consulting.
·
Consulting adjusted operating margin was 14.8%, down 20
basis points. For the first half of 2010, with flat organic revenue, Aon
Consultings industry-leading margins have expanded 20 basis points to 16.1%.
·
After announcing the
sponsorship of Manchester United in 2009, the new team shirts with the Aon logo
were revealed on July 15. As the number one sports franchise, in the
number one sport in the world, Manchester United has more than 330 million fans
worldwide. The sponsorship represents a well-researched and significant
opportunity for both global brand recognition as well as the ability to amplify
Aon leaderships vision to unite the firm globally.
Additional Detail: Hewitt Business Updates
·
Hewitt
reported Q3 results on August 5.
·
Overall,
Hewitt delivered a solid quarter with strong results from the Consulting and HR
Business Process Outsourcing (HR BPO) segments and soft, but anticipated,
results in the Benefits Outsourcing segment.
·
Consulting
delivered a 5% organic constant currency growth rate---the highest growth rate
in more than a year and a half---with each of the practices contributing, and
many of the practices making a nice comeback as well. It is especially pleasing
to see demand return in some of the more discretionary practices, Talent &
Organization Consulting and Communication Consulting.
·
Compared
to Mercer, Hewitts revenues were ahead in all practices except Investment
Consulting. Towers Watson revenues were down for the most recent quarter.
·
HR BPO
delivered another quarter of profit, and added another new client (a large
insurance company). This addition means that the business has met its new
client growth goals for the year.
·
Even
though Hewitt experienced declining project revenue and margins in Benefits
Outsourcing, the business continues to make good, steady progress against the
objectives of investing back in products and delivering excellent service.
·
Hewitt
has a strong sales pipeline in each of its businesses and feels good about its
prospects for the coming year.
2
Integration News
·
Both Aon and Hewitt recently
set the dates for their respective stockholder votes on September 20,
2010.
·
Though this is one milestone
required to close the transaction, we still have a number of regulatory hurdles
ahead including reviews by anti-trust agencies in the U.S., the EU, and Canada.
·
Were making steady progress
on integration planning.
·
Weve identified both
client-facing and non-client facing integration leaders and working teams. They
are developing plans to bring together our two firms in a way that allows us to
stay focused on our client commitments.
·
Many clients have asked how
we plan to achieve the synergy targets that were communicated when the merger
was announced. This is obviously one of the key tasks of the integration teams.
·
We are committed to
achieving these synergies in a manner that protects our ability to continue to
serve all of our clients well and continue to invest in innovative solutions to
meet our clients needs. As youd expect, most of this savings comes from
eliminating duplicate public company costs and streamlining our combined
infrastructure and corporate functions.
·
Were pleased that our
companies are working well together and share a set of common goals and values,
with client service being at the forefront.
·
While there are obviously
integration questions that our dedicated teams are working through, rest
assured that everything we do will be in the best interest of our clients.
·
Once we clear some
additional regulatory approvals, we will be in a position to name our senior
management team reporting to Russ Fradin, the chairman and chief executive
officer of the combined Aon Hewitt.
·
Well keep you informed of
these decisions.
·
Both companies are
tremendously excited at the opportunities ahead to serve clients in a greater
capacity and meet even more of their needs.
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 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 Associates, Inc. (Hewitt) to approve the proposal
to adopt the merger agreement; the failure of the stockholders of Aon
Corporation (Aon) to approve the proposal to approve the issuance of shares
of Aon common stock to Hewitt stockholders in the merger; the loss of key Aon
or Hewitt employees following the merger; 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 with customers, partners and others; 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 impact
revenue and expense; rating agency actions that could affect Aons ability to
borrow funds; changes in the funding status of Aons various defined benefit
pension plans and the impact of any increased pension funding resulting from
those changes; Aons ability to implement restructuring initiatives and other
initiatives intended to yield cost savings, and the ability to achieve those
cost savings; the impact on risk and insurance services commission revenues of
changes in the availability of, and the premium insurance carriers charge for,
insurance and reinsurance products, including the impact on premium rates
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and
market capacity attributable to catastrophic events; 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, including potential liabilities
arising from error and omissions claims against Aon or Hewitt; the extent to
which Aon and Hewitt retain existing clients and attract new businesses; the
extent to which Aon and Hewitt manage certain risks created in connection with
the various services, including fiduciary and advisory services, among others,
that Aon and Hewitt currently provide, or will provide in the future, to
clients; the impact of, and potential challenges in complying with, legislation
and regulation in the jurisdictions in which Aon and Hewitt operate,
particularly given the global scope of Aons and Hewitts businesses and the
possibility of conflicting regulatory requirements across jurisdictions in
which Aon and Hewitt do business; 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 merger, Aon
filed with the SEC a definitive joint proxy statement, which also constitutes a
prospectus of Aon. The joint proxy statement/prospectus
was mailed to Aon stockholders and Hewitt stockholders on or about August 19,
2010. Before making any voting or investment decision, investors and
stockholders are urged to read carefully in their entirety the definitive 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 contain and 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 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.hewitt.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, are contained
in the definitive joint proxy statement/prospectus filed by Aon with the SEC
and will be contained in other relevant materials to be filed by Aon or Hewitt
with the SEC when they become available. You can obtain free copies of these
documents from Aon and Hewitt using the contact information above.
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