Aon plans $7 billion of new debt to fund cash portion of NFP acquisition

By Wendy Van Sickle

Columbus, Ohio, Dec. 20 – Aon plc is planning around $7 billion of new debt to fund the cash portion of the consideration for its acquisition of NFP, a middle market property and casualty broker, benefits consultant, wealth manager and retirement plan adviser, according to a news release and a slide presentation outlining the acquisition plan.

The purchase price is expected to be $13.4 billion, comprising $7 billion in cash and $6.4 billion in Aon shares. Aon said it expects about $12.5 million of negative interest carry expense per quarter following transaction-related debt issuance.

The company is expecting to raise $5 billion of new debt in 2024. The other $2 billion is expected to be raised at closing, with all of the new debt spanning a range of maturities and subject to market conditions.

Aon expects it will maintain its credit ratings of Baa2 from Moody’s and A- from S&P.

The transaction is expected close mid-2024, but conservatively has a June 30, 2025 outside date.

Aon said its purchase of NFP, from funds affiliated with Madison Dearborn Partners and funds affiliated with HPS Investment Partners, will expand its presence in the fast-growing middle-market segment, with capabilities across risk, benefits, wealth and retirement plan advisory.

NFP will continue as an independent but connected platform within Aon.

Aon is a London-based provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services. NFP is based in New York.

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