Aon PLC will Sell Benefits Outsourcing to Blackstone Group LP in $4.3 Billion

Company - Pavan Pandey - Feb 10,2017

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aon plc will sell benefits outsourcing to blackstone group lp in 43 billion dollars

On Friday, UK-based Insurance broker, Aon PLC, stated that it has agreed to sell its benefits administration and HR BPO platform to Blackstone Group LP for $4.3bn in cash.

According to Aon PLC, the company expected the arrangement to develop its return on invested capital and add to adjusted incomes per share in next year. The company also stated that it assumes to allocate part of the proceeds from this deal to boost its share repurchases.

The company further added that the repurchase program has been improved by $5 billion, bringing the total amount presently certified for repurchases to about $7.7 billion as of February 10.

According to the source, the private equity firm, Blackstone Group LP succeeded over acquisition firm Clayton Dubilier & Rice LLC, which was reported to be in advanced discussions with Aon Plc in the month of January for a $4.5 billion (£3.6 billion) agreement.

Private equity companies have been creative investors in businesses that help corporations cut costs by outsourcing huge parts of their executive functions since such operations can produce solid cash flows. A few years after they invest, they pursue to sell proprietorship of those assets at a huge profit.

The deal is subject to customary closing conditions, comprising acceptance of specified antitrust clearances, and is projected to complete by the end of the second quarter this year.

The President and Chief Executive Officer of Aon plc, Mr. Greg Case, stated that this deal strengthens Aon's spot as the prominent, global professional services corporation focused on retirement, risk and health.

Mr. Case further added that the auction of Aon’s outsourcing platform makes incremental capital to reinforce development in core operations, and boosts the hunt of inorganic growth chances that address evolving customer requirements, similar to recent procurements in health brokerage solutions and cyber risk advisory.