Aon Plc announces $13.4bn acquisition of NFP to expand market reach

Aon plc (NYSE: AON), a global leader in professional services, has made a strategic move to acquire NFP, a prominent middle market property and casualty broker, benefits consultant, wealth manager, and retirement plan advisor. The deal, valued at an estimated $13.4 billion, will be funded through $7 billion in cash and $6.4 billion in Aon stock. This acquisition is a significant step for Aon, funded by Arch Financial Holdings (UK) Limited and affiliated funds with HPS Investment Partners, in expanding its presence in the lucrative middle-market segment.

Expansion of Aon’s Middle-Market Segment

The acquisition of NFP aligns with Aon’s Aon United strategy and Aon Business Services operating platform. It significantly broadens Aon’s capabilities across risk, benefits, wealth, and retirement plan advisory sectors. Doug Hammond, Chairman and CEO of NFP, will continue leading the business as an independent yet connected platform within Aon, under the supervision of Eric Andersen, President of Aon.

Greg Case, CEO of Aon, commented on the acquisition’s strategic importance. “This move will enhance our relevance to clients and create opportunities for our colleagues. We’re excited to integrate NFP’s entrepreneurial culture and expertise with our capabilities to deliver more value,” he said.

NFP’s Market-Leading Position

NFP, with more than 7,700 colleagues, has established itself as a leader in various sectors, including property and casualty brokerage and wealth management. Founded in 1999, NFP’s approach to client service and talent attraction has made it a prime candidate for Aon’s expansion plans.

Mark Hammond of NFP expressed enthusiasm about the acquisition, stating, “Joining forces with Aon will propel our growth and provide our clients with Aon’s global resources. We share similar values and market segment strategies, making this an ideal partnership.”

Positive Outlook for Both Companies

The acquisition, expected to close in mid-2024, is projected to generate over $2.8 billion in value creation, despite being dilutive to adjusted EPS in 2025. It aligns with Aon’s long-term financial goals, including mid-single or greater organic revenue growth and double-digit free cash flow.