8-K/AFinancial EventsExhibits & Filings

Aon plc 8-K/A Report, Exit or Disposal Costs (Jan 27, 2009)

Filed January 27, 2009For Securities:AON

Summary

This 8-K/A filing from Aon plc provides an amendment to a previous filing and details the financial impact of a global restructuring plan announced in conjunction with the acquisition of Benfield Group Limited. The company is now able to provide good faith estimates for the costs associated with this restructuring, which was initially announced on November 28, 2008. Investors should note the total estimated costs and the breakdown of these expenses, as well as the anticipated cost savings over the next few years. The total estimated costs for the restructuring plan are approximately $185 million. This includes significant amounts for employee termination costs ($126 million) and lease consolidation costs ($49 million), along with asset impairments and other related expenses. Approximately $128 million of these costs are expected to be paid in cash, primarily for severance. Aon anticipates that this restructuring, intended to streamline operations post-acquisition, will lead to substantial cost savings, with estimated annual savings escalating from $33-41 million in 2009 to approximately $122 million by 2011. The company cautions that actual savings, costs, and timing may vary.

Key Highlights

  • 1Aon plc has finalized its good faith estimates for a global restructuring plan linked to the Benfield Group acquisition, as an amendment to its November 28, 2008 filing.
  • 2Total estimated costs for the restructuring plan are approximately $185 million.
  • 3Key cost components include $126 million for employee termination costs and $49 million for lease consolidation.
  • 4Approximately $128 million of the total costs are expected to be paid in cash, primarily for severance and restructuring expenses.
  • 5The company anticipates significant cost savings resulting from the plan, with estimated annual savings projected to reach $122 million by 2011.
  • 6Estimated savings for 2009 are between $33 million and $41 million, increasing to $84 million-$94 million in 2010.
  • 7Aon warns that actual costs, savings, and timing may differ from estimates due to potential changes in scope or underlying assumptions.

Frequently Asked Questions

This filing amends a previous 8-K by providing finalized good faith estimates for the costs associated with Aon's global restructuring plan, which is being implemented in conjunction with its acquisition of Benfield Group Limited. The company could not initially provide all necessary estimates but is now able to do so.

The total estimated costs for the restructuring plan are approximately $185 million. This includes $126 million for employee termination costs, $49 million for lease consolidation, $8 million for asset impairments, and $2 million for other associated costs.

Approximately $128 million of the total estimated costs of $185 million is expected to be paid in cash, mainly for severance and other restructuring-related expenses. An additional $49 million is estimated for lease consolidations.

Aon anticipates significant cost savings. The plan is expected to deliver approximately $33-41 million in savings in 2009, $84-94 million in 2010, and reach approximately $122 million in annualized savings by 2011. These savings are before any potential reinvestment.