Brokerage giant Aon has reportedly agreed to sell its employee benefits outsourcing business, a move that would supposedly allow the London-headquartered firm to focus on insurance or venture into other growth areas.
Citing sources familiar with the matter, Reuters reported that private equity firm Blackstone Group will acquire the Aon division for US$4.8 billion (£3.8 billion).
According to the news agency, Blackstone prevailed over buyout firm Clayton Dubilier & Rice LLC, which was reported to be in advanced discussions with Aon in January for a US$4.5 billion (£3.6 billion) deal.
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The sources told Reuters that the deal with Blackstone will be announced today when Aon also reveals its earnings for the fourth quarter and the entire 2016.
Reuters noted last month that the disposal of the benefits outsourcing business signals Aon’s intent to focus more on its insurance and risk management businesses. Now, the move is also seen as an opportunity for the company to invest in growth areas beyond its core insurance brokerage operations, such as cyber security and health insurance, according to the news agency.
“The potential divestiture of the outsourcing business moves Aon away from the most mature and lower growth area of the business,” Reuters quoted William Blair analysts as saying in a previous note.
“Selling the benefits administration business would therefore be consistent with the actions to improve the business mix.”
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