Insurance broker Aon said Friday that the final cost of its Benfield purchase was $1.4 billion, $350 million less than originally projected because of the strong dollar.

In August Chicago-based Aon Corp. said the acquisition of the London-based reinsurance broker, for ?3.50 a share plus the assumption of ?91 million of the firm’s debt, was expected to cost Aon $1.75 billion. However, Aon explained, with improvement in the U.S. dollar, the actual cost as of Nov. 25 works out to $1.43 billion.

Aon announced today that Grahame Chilton, the former chief executive of Benfield and now vice chairman of Aon Group, will lead the effort to consolidate the units and also head a new unit, Aon Specialty, which will focus on construction, energy, marine, space and aviation clients. He will work directly with Greg Case, president and chief executive officer of Aon.

The newly formed reinsurance brokerage unit will be named Aon Benfield.

“The completion of this transaction marks an important milestone in the history of our firm and a new era of leadership for the global reinsurance industry,” said Mr. Case in a statement.

Aon said restructuring will cost $185 million over a three-year period and result in the elimination of between 500 and 700 positions, “predominantly” non-client facing. These moves are expected to result in approximate savings of $33-to-$41 million in 2009, $84-to-$94 million in 2010, and $122 million in 2011.