Aon Plc · NYSE:AON
Aon — Merger or Acquisition (August 2008)
15 slides from Aon's merger presentation, Aug 22, 2008
Slide 1: Benfield Combination Presentation to Investors August 2008
1 Benfield Combination Presentation to Investors August 2008
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement This presentation contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Thes
Slide 3: Creating a premier reinsurance franchise
3 Creating a premier reinsurance franchise We have announced an agreement to acquire Benfield Group – the leading independent global reinsurance intermediary. We believe the combination of Benfield with Aon Re creates an unparalleled reinsurance franchise with: World-class talent Enhanced scale and
Slide 4: A compelling opportunity
4 A compelling opportunity Benfield is a unique asset: Strong brand and reputation for innovation Client-focused culture and talented staff Proprietary technology and analytical advantage High client retention, with upside Growth opportunities through advisory business Highly complementary to Aon’s
Slide 5: World-class talent
5 World-class talent A key element of the investment thesis was longstanding respect for Benfield’s management team and knowledge of the high caliber and depth of its producers and brokers. Initial conversations confirmed: Deep mutual respect Complementary cultures on multiple dimensions Need to int
Slide 6: Increased scale and scope
6 Increased scale and scope Complementary books of business in core markets in the U.S. and U.K. Presence in developing markets around the world that both firms have targeted for growth, including Asia, Central and Eastern Europe, Africa and Latin America Longstanding strength in Japan A strong posi
Slide 7: Industry leading analytic capability
7 Industry leading analytic capability Unique analytics and modeling capability Differentiated client facing technology Award winning client service and broking skills A scalable global broking and client management platform Benfield has distinguished itself by building outstanding analytic capabili
Slide 8: Expanded client base
8 Expanded client base Together, Aon Re and Benfield will provide distinctive client service to all major global and regional carriers in every geography and every major reinsurance market. The combined team will offer clients an integrated set of risk management products and services, including tre
Slide 9: Transaction terms and timing
9 Transaction terms and timing We will acquire Benfield for £3.50 per share or $6.55 per share through an all cash offer*. A 29% premium to August 21 close Total equity value of the transaction is £844m or $1.578b Total enterprise value of transactions is £935m or $1.748b, which includes assumption
Slide 10: Shareholder returns
10 Shareholder returns The deal will drive increased returns for Aon shareholders We expect the transaction to be accretive in the first year * Excludes special charges of £54m including: performance based retention, severance costs, and asset impairments 7.1% 5.0% 0.4% 2011 2010 2009* Estimated EPS
Slide 11: Cost synergies from transaction
11 Cost synergies from transaction Key assumptions driving pro forma model: No revenue synergies Run-rate expense synergies of £65m or $120m Expense synergies from support area and infrastructure overlap Expense run rate synergies fully realized by 2011 122 84 - 94 33 - 41 $ millions* 65 45 - 50 18
Slide 12: Share repurchase will be completed
12 Share repurchase will be completed We intend to complete the previously announced share repurchase program by the end of 2009 $885m on current program remaining as of August 22, 2008 Transaction anticipated to produce a better return for shareholders than share repurchase Potential for 200bps ROI
Slide 13: Implementation underway
13 Implementation underway We expect to complete the transaction by the end of the 2008 Major completion milestones: – Post proxy statement for Benfield shareholder meeting – Special general meeting of Benfield shareholders – Regulatory approvals
Slide 14: Aon Benfield Re: a compelling opportunity
14 Aon Benfield Re: a compelling opportunity + = Industry Leadership Talent • Innovation • Analytics • Insight • Advice
Slide 15: Q & A
15 Q & A