Aon Corp.'s plan to purchase London-based reinsurance broker Benfield Group Ltd. for some $1.75 billion has drawn mixed reviews from the three major rating agencies, with concerns raised about the deal's impact on Aon's liquidity and integration risks.

Fitch Ratings, Moody's Investor's Service and Standard & Poor's said they believe the company's move would solidify the position of Chicago-based insurance broker Aon as the top reinsurance intermediary. However, they differed over how the acquisition will be executed and its impact on Aon's financial position.

Aon said on Aug. 22 that it would buy Benfield for about $6.55 a share–29 percent above Benfield's Aug. 21 closing stock price. As part of the deal, Aon will assume $170 million of the company's debt, which one rating service termed modest. The all-cash deal is expected to be completed by the end of this year.

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.