Insurance News Mon, Aug 25, 2008
Aon Set To Snap Up Benfield Group In $1 Billion Deal
Aon is on the prowl again having agreed to acquire UK reinsurance outfit Benfield Group Ltd in a deal valued at $1.58 billion. Those familiar with the industry may remember that Benfield Group Ltd was the brainchild of former Chelsea Football Club director Matthew Harding who tragically died in a helicopter crash back in 1996.
The deal is seen as attractive for both parties although there is a suggestion that the price is more attractive to Aon who seem to have taken advantage of the current malaise in the financial markets as the credit crunch continues to hit home. However, when you consider that the 350p share takeout price offers a 29% premium to the price prior to the announcement of the deal, it does not look too bad for shareholders.
As the name suggests, reinsurance groups offer the chance for insurance companies to offset some of their larger risks. The service is very popular with insurance companies which may have potentially large exposure in the event of hurricanes and other natural disasters.
This move is just the latest in a recent spate of takeovers by the giant insurance broker Aon and with plenty of funds in the war chest it looks as though they may soon be back in the hunt for more acquisitions, hoping to make the most of reduced valuations in the marketplace.
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