Aon to sell assets for $1.4bn to facilitate merger

August 2021 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2021 Issue

In order to facilitate a merger with advisory, broking and solutions company Willis Towers Watson, professional services firm Aon has signed definitive agreements to sell its US retirement business and retiree health exchange business to private investment firm Aquiline Capital Partners and tech-focused employee health and wellness company Alight, respectively.

The $1.4bn merger will build on Aon’s track record of progress on key financial metrics and achievement over the past decade and 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.

The agreements are also intended to address antitrust concerns raised by the US Department of Justice (DOJ) in relation to the markets in which Aon and Willis Towers Watson operate. Both companies have pledged to work toward obtaining regulatory approval in all relevant jurisdictions.

Providing a broad range of risk, retirement and health solutions, Aon’s 50,000 employees in 120 countries empower results by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

“These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” said Greg Case, chief executive of Aon. “These are very capable teams that have demonstrated exceptional dedication to our clients and our firm. I want to recognise their contributions and reinforce that we are confident they will have similar opportunities with Aquiline and Alight.”

Aon’s US retirement business that Aquiline will acquire includes approximately 1000 colleagues and the agreement includes US core retirement consulting, US pension administration and the US-based portion of Aon’s international retirement consulting business, along with many solutions and tools. The agreement does not, however, include Aon’s non-US actuarial, non-US pension administration or international retirement businesses based outside of the US.

Aon’s 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 artificial intelligence and data analytics to optimise business process as a service to deliver superior outcomes for employees and employers across a comprehensive portfolio of services. Alight’s 15,000 employees help companies of all sizes, including 70 percent of the Fortune 100.

Based in New York and London, Aquiline invests in companies across financial services, technology, business services and healthcare. The firm has $6.4bn in assets under management and 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, chairman and chief executive of Aquiline. “Aquiline’s significant experience across retirement and investments positions us to build on the strong business Aon has created.”

Both of Aon’s divestitures are contingent on the completion of its pending merger with Willis Towers Watson, as well as the receipt of required regulatory approvals and clearances, including with respect to US antitrust laws, along with other customary closing conditions. The transactions are expected to be completed in the third quarter of 2021.

Mr Greenberg concluded: “We look forward to working closely with the clients, management and colleagues of Aon’s US retirement business to create further value for all stakeholders.”

Fraser Tennant