Aon Buys Hewitt for $4.9 Billion
Hewitt will not remain a stand-alone company. Aon plans to integrate Hewitt with its existing consulting and outsourcing operations called Aon Consulting. It will operate the division under the newly created name Aon Hewitt.
The buyout is at a huge premium since the price is well above Hewitt's 52-week high of $43.85. Hewitt's revenue in the last fiscal quarter, which ended in September, was $3.1 billion. Net income was only $265 million. The two companies say there'll be savings, but they'll hardly be immediate. "The transaction is expected to generate approximately $355 million in annual cost savings across Aon Hewitt in 2013, primarily from reduction in back-office areas, public company costs, management overlap and leverage of technology platforms," the companies said.