Aon to Sell U.S. Retirement, Retiree Health Units for $1.4B to Smooth WTW Acquisition
Global insurance broker Aon has agreed to sell its U.S. retirement business to private investment firm Aquiline and its Retiree Health Exchange individual health insurance business to Illinois-based digital services firm Alight for total gross consideration of $1.4 billion.
Aon said the sales are intended to address certain questions raised by the U.S. Department of Justice with respect to Aon’s proposed $30 billion takeover of rival Willis Towers Watson, creating the world’s largest insurance broker.
Aon and Willis Towers Watson said they continue to work toward completing the proposed merger as soon as possible in the third quarter of 2021.
“These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” said Greg Case, Aon CEO.
Aon and Willis Towers Watson have previously announced the divestiture of Willis Re, a set of Willis Towers Watson corporate risk and broking and health and benefits services to rival Arthur J. Gallagher, and Aon’s retirement and investment business in Germany. Total 2020 revenue announced or offered to be divested, contingent on the combination, is $2.3 billion. Of the $2.3 billion, approximately 35% occurred in Q1, 23% in Q2, 18% in Q3, and 24% in Q4.
The U.S. retirement business Aquiline will acquire includes approximately 1000 colleagues and the agreement includes U.S. core retirement consulting, U.S. pension administration and the U.S.-based portion of Aon’s international retirement consulting business, along with many solutions and tools, including: Benefit Index and SpecSelect; Risk Analyzer; DBCalc and YPR; and Aon Pooled Employer Plan (PEP).
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The agreement with Aquiline does not include Aon’s non-U.S. actuarial, non-U.S. pension administration or international retirement businesses based outside of the U.S. Aquiline Capital Partners invests in companies across financial services, technology, business services, and healthcare.
“The retirement solutions sector is benefitting from an increased focus on long-term investment security and risk management of plans,” said Jeff Greenberg, Aquiline chairman and CEO. “Aquiline’s significant experience across retirement and investments positions us to build on the strong business Aon has created.”
The Aon Retiree Health Exchange, which Alight will acquire, is an individual market platform for employers and their retirees.
All of the announced regulatory divestitures are contingent on the completion of the pending Aon and Willis Towers Watson merger, as well as other customary closing conditions.