Aon agrees mega-£10.6bn deal to acquire NFP from Ardonagh stakeholders MDP and HPS

Global broking giant Aon has signed a deal to acquire rival US broking firm NFP for a total consideration estimated to reach £10.6bn ($13.4bn) at the time of close.

In a statement released yesterday (21 December 2023), Aon said the purchase had been agreed in a bid to expand its middle market segment.

NFP is a middle-market property and casualty broker, benefits consultant, wealth manager and retirement plan advisor headquartered in the US, but also operates globally, including in the UK.

Aon will acquire NFP from from funds associated with NFP’s primary capital backer Madison Dearborn Partners (MDP) and funds linked with HPS Investment Partners – both of which also hold investments in the Ardonagh Group.

On completion of the deal, NFP will operate as an independent but connected broking business, going to market as ‘NFP, an Aon company’.

Chairman and chief executive of NFP, Doug Hammond, will continue to lead the business, reporting to Eric Andersen, president of Aon.

The acquisition will be financed through £7bn in cash and £6.4bn in Aon stock, with the broker estimating that the deal will yield over £2.8bn in value creation, considering the capitalised value of expected pre-tax synergies and capital structure, net of approximately £400m in anticipated one-time transaction and integration costs.

Greg Case, chief executive officer of Aon, said: “The acquisition will advance our relevance to clients, create opportunities for our colleagues and further strengthen our shared cultural values.

“Doug and NFP have built an exceptional team, with a complementary one-firm mindset, and we expect to both learn from their entrepreneurial culture and share with them the depth and breadth of our capabilities to create more value for clients, colleagues and shareholders.”

Middle market

In a statement, Aon said the acquisition of NFP “expands Aon’s presence within the large and fast growing middle-market segment, with capabilities across risk, benefits, wealth and retirement plan advisory.”

Aon explained that the acquisition aligns with Aon’s ongoing Aon United strategy and follows a recently disclosed restructuring charge of around £900m million, anticipated to result in approximately £350m in annual, run-rate savings by the close of 2026.

In 2023’s Top 50 Brokers report, Aon came in at sixth with revenue of £1.09bn.

“This is an exciting milestone in NFP’s evolution that reflects the tremendous quality of the business we’ve built and the exceptional people who drive our success,” added Hammond.

• Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.26 = £1, which was correct as of 1 December 2023.