Aon plc this morning said it has a $13.4 billion deal in place to purchase broker NFP to expand its middle-market segment.
The purchase price will be funded by $7 billion in cash and $6.4 billion of Aon stock. Closing is expected mid-2024, Aon said.
“We have continually evolved our leading capabilities to better serve our clients’ growing needs amidst increasing volatility across the marketplace,” said Greg Case, CEO of Aon, in a statement. “The acquisition will advance our relevance to clients, create opportunities for our colleagues and further strengthen our shared cultural values.”
NFP chief executive Doug Hammond will continue to lead NFP, a leader in P/C brokerage, benefits consulting, wealth management and retirement plan advisor for middle-market clients, as an independent but connected platform within Aon under the brand “NFP, an Aon company.” Hammond will report to Eric Andersen, president of Aon.
“Doug and NFP have built an exceptional team, with a complementary one-firm mindset, and we expect to both learn from their entrepreneurial culture and share with them the depth and breadth of our capabilities to create more value for clients, colleagues and shareholders,” Case added.
According to its website, NFP in 2022 had P/C revenue of $738 million as well as $1.1 billion in revenue from benefits and life, and $362 million in revenue from its wealth and retirement business.
Aon and New York-based NFP will operate separately until the expected mid-2024 closing date, but Aon said financial considerations of the agreement are calculated based on a closing date of June 30, 2025.
“This is an exciting milestone in NFP’s evolution that reflects the tremendous quality of the business we’ve built and the exceptional people who drive our success,” said Hammond. “Aon is an industry leader in delivering risk capital and human capital capabilities and this acquisition is compelling for many reasons. Our clients will benefit from Aon’s global resources and distribution, while our people will have more opportunities to accelerate the growth of NFP.
Aon said the transaction is expected to generate more than $2.8 billion in pretax gains, excluding about $400 million in expected one-time transaction and integration costs.