Aon has offered $13.4 billion for NFP.
The M&A carousel is spinning at full speed even shortly before Christmas. Insurance broker Aon has just announced an acquisition worth billions of dollars. Aon wants to swallow the company NFP, a broker of damage and accident insurance, for more than 13 billion dollars.
With this, the company could once again succeed in a big coup. Aon’s last attempt to buy a major competitor failed at the beginning of 2020. Then the US Department of Justice classified the planned takeover of WTW as anti-competitive. The deal was finally abandoned in July 2021.
Aon: Insurance Specialist from Ireland… Aon is an Irish company based in Dublin and headquartered in London operating in the insurance industry and risk management sector. The company is listed on the New York Stock Exchange and listed in the US stock index S&P 500. It employs over 50,000 people in over 120 countries around the world.
The company was formed in 1982 from the merger of the US insurance companies Ryan Insurance Group and Combined International Corporation. Aon built a larger and larger network through various mergers and eventually became a global conglomerate. In the last financial year, Aon achieved a net profit of 2.58 billion dollars with a turnover of 12.47 billion dollars.
…puts 13.4 billion dollars on the table for NPF Now the company wants to swallow NFP. NFP is a broker company for damage and accident insurance, which offers advice to customers with more than 7,700 employees in the areas of social benefits, asset management and retirement.
The transaction is expected to be completed by mid-2024. The purchase price consists of a cash component of 7 billion dollars plus 6.4 billion dollars in Aon shares. NFP should continue to be operated as an independent but affiliated platform within Aon under the brand „NFP, an Aon company“.
Majority of revenues from the US According to the company website, the New York-based company NFP achieved revenues of 738 million dollars in damage and accident insurance, 1.1 billion dollars in life insurance and 362 million dollars in asset and retirement insurance in 2022. About 88% of the revenues come from the US. Based on the revenues, NFP ranks 10th on the list of the top 100 P/C agents (note: property and casualty insurance) in 2023 of the Insurance Journal.
Positive effect on earnings expected The transaction follows the recently announced restructuring costs of Aon of around 900 million dollars, which should lead to annual savings of around 350 million dollars by the end of 2026.
Aon is projecting a pre-tax profit of more than 2.8 billion dollars through the acquisition. Around 400 million dollars in one-time transaction and integration costs are not included.
The management of Aon is sticking to the long-term goals: The insurance company is aiming for mid- or higher organic growth, expansion of the adjusted operating margin and double-digit free cash flow.