Aon fought off tough competition from private equity houses to acquire niche broker Footman James in a deal estimated to be worth up to £80m.

Sources said interest in the broker from private equity houses caused Footman James to reject an initial offer from Aon.

Insurance Times predicted the sale last month (News, 18 January).

The terms of the deal, confirmed this week were not disclosed but sources said Aon paid between £60m and £80m.

The interest from the unnamed private equity house may have contributed to the high price paid by Aon.

It is understood that Equity was lined up to buy the broker as part of its deal to buy broker Open + Direct. But the arrangement collapsed when Insurance Australia Group bought Equity, and Footman James' value escalated.

Under the terms of the deal Footman James will remain an independent subsidiary of Aon. In a statement, Aon said: "Aon's wider product provision, infrastructure and backing will provide Footman James with both stability and the opportunity for future development of the business."

Paul Matthews, managing director of the intermediary, said: "This transaction with Aon presents an exciting opportunity."

Aon denied that the acquisition marked the beginning of a spending spree and said that the broker was a "perfect fit" with its existing business.