Aon to Buy British Firm in $1.75-Billion Deal

Aon Corp., the world's biggest insurance broker, said it agreed to buy Britain's Benfield Group Ltd. for almost $1.6B cash. Chicago-based Aon said combining Benfield, a leading independent reinsurance intermediary, with its existing reinsurance operations would create a global, diverse franchise. Under the deal, It will also assume 91M pounds ($170M) of Benfield net debt in the deal, boosting the overall value of the transaction to about 935M pounds ($1.75B). Benfield's share price shot up 30% after the announcement, pushing the stock to 352.75 pence ($6.56) midmorning and above the offered price. "The acquisition is expected to enhance Aon's capabilities in the significant Florida and Southeast U.S. property-catastrophe markets as well as in the rapidly growing Asia-Pacific and Latin American regions," the companies said in a statement to the London Exchange. "In addition, the combination offers the opportunity to capitalize on the significant investment both businesses have made in risk modeling & analytics to create a global market leading capability in this key area," they added. Aon said it'll fund the acquisition with existing cash.