The merger agreement provides that Aon will acquire 100% of the shares of ASI in an all-stock transaction. Under the merger agreement, each share of ASI will convert into .425 shares of Aon common stock, provided that the average closing price of Aon common shares for a 10-day measurement period ending five business days prior to the effective date of the merger is between $34 and $42 per share. To the extent that the average closing price of Aon common stock during this period is above $42, the conversion rate will be adjusted so that an ASI stockholder will receive Aon common shares having a value equal to $17.85. Conversely, if the average closing price during the measurement period is between $34 and $31, the conversion rate will be adjusted so that an ASI stockholder will receive Aon common shares having a value equal to $14.45. If the average closing price during the measurement period is below $31, ASI stockholders will receive .466129 shares of Aon common stock for each share of ASI stock that they own.
ASI may terminate the agreement if Aon’s average common share price for the 10-day measurement period is below $31. Completion of the merger is subject to customary closing conditions, including stockholder and regulatory approval. In connection with the execution of the merger agreement, holders exceeding a majority of the voting shares of ASI have already entered into an agreement with Aon to vote in favor of the merger.
Upon consummation of the merger, which is expected to occur within 90 days, ASI will become part of the Aon Consulting organization. ASI’s founders Bernard F. Reynolds, Eli Salig and Seymour Adler will continue in their respective roles as senior executives.
Commenting on the transaction Mr. Reynolds said, We are pleased to have reached an agreement which allows our shareholders to realize the significant value created in this company over the past 23 years. By joining forces with one of the largest employee benefit, human resources and management consulting organizations in the world we know that our ability to broaden, deepen and expand the quality services we offer both our clients and Aon’s will be assured into the future. At the same time, our management and staff will become an integral part of an excellent company committed to growing this business through continued investment in people and solutions that provide outstanding client service. We look forward to making that journey together.
Commenting on the transaction Patrick G. Ryan, chairman and chief executive officer, Aon Corporation said, Our clients increasingly face critical issues of attraction, retention and productivity of employees, and we believe ASI addresses these key needs. ASI will extend our services in employment process outsourcing, performance improvement services, and compensation consulting, including McLagan Partners, the leading compensation consultancy to the financial services industry.
Donald C. Ingram, chairman and chief executive officer, Aon Consulting Worldwide, stated, By adding ASI’s capabilities, we will greatly strengthen our human resources outsourcing and compensation consulting services. Together with ASI’s management team, we look forward to building our worldwide business.
