U.S. giant Aon makes cash offer for Benfield
Aon Corp, the world's largest insurance broker, has made a recommended cash offer for Benfield valuing the UK-listed broker at 844 million pounds.
Company pensions swing to multi-billion pound surplusThe two sides said on Friday that the acquisition price of 350 pence per share in the reinsurance broker represents a premium of over 29 percent to the closing price on Thursday.
Shares in Benfield, whose speciality areas range from arranging cover for earthquakes and hurricanes to kidnap and ransom, were up nearly 30 percent in early trade on Friday, changing hands at 352.3p at 9.28 a.m.
Aon said the deal, agreed unanimously by both boards, would lead to Benfield being integrated into Aon's existing reinsurance operations, Aon Re Global.
The two sides expect the deal to add to Aon's presence in developing market in Asia and Latin America, its analytical capability, and boosts Aon's standing in the U.S. Florida and South East property-catastrophe markets.
The deal is expected to generate 65 million pounds in savings in 2011, largely from shared administration.
Aon said it would fund the deal through cash on hand and expects it to close by the end of the year.
LONG-TIME TAKEOVER TARGET
Benfield, the world's third largest reinsurance broker and the last major independently-owned franchise, has long been a takeover target for larger rivals Aon, Marsh & McLennan Cos Inc and Willis Group Holdings Ltd.
The insurance and reinsurance broking sectors have seen a burst of consolidation recently as global reach and an increasing investment in sophisticated risk analysis models has meant smaller brokers struggle to win or retain clients.
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