Aon South Africa offers to buy listed Glenrand M•I•B

Anton Roux, Aon sub Saharan Africa Chief Executive Officer

Aon South Africa, a leading risk management, insurance brokerage, actuarial consulting organisation and subsidiary of Aon Corporation (NYSE:AON), has announced its firm intention to ultimately acquire the entire business of JSE Limited listed insurance broking and risk advisory services provider, Glenrand M·I·B.

The offer of R2.00 per Glenrand M·I·B ordinary share plus a R24 million payable to the BEE shareholders, places a value of approximately R523 million on the proposed transaction. A further amount of 30 cents per share, or approximately R75 million, will be in an Escrow account and these funds will be released pending and conditional as the final outcome of a legal dispute dating back to 2006. Subject to the necessary approvals by the Securities Regulation Panel, the shareholders of Glenrand M·I·B, the Competition Commission, as well as various other regulatory approvals, the transaction will make Aon South Africa a leading global risk broker in its sector of the financial services market in South Africa as well as a leading global broker in Africa with offices in 32 cities and towns throughout the African continent.

Anton Roux, Aon sub Saharan Africa Chief Executive Officer, said, “The proposed acquisition will elevate Aon’s position in the local market and provide our clients with a global network and top talent while offering additional economies of scale in certain of our niche segments. Glenrand M·I·B’s strong presence in the South African market is a natural complement to Aon’s established Africa footprint.”

“This acquisition brings together two premier organizations and reinforces Aon’s strong commitment to the African continent. Combining the best talent between our two organizations enhances our ability to deliver world class solutions to our clients,” added Steve McGill, Chairman and Chief Executive Officer of Aon Risk Solutions.

Glenrand M·I·B will add around 15000 corporate and commercial clients to Aon – including many of the JSE’s blue-chip companies - as well as over 60 000 personal lines clients. Glenrand M·I·B’s existing operations in sub Sahara Africa will strengthen Aon’s network, which together span 14 countries (excluding correspondents) across the region. The combined entity will also increase the number of offices nationally to 17.

If the acquisition is approved, Glenrand M·I·B’s clients will have immediate access to Aon’s global network spanning more than 500 offices in 120 countries across all business lines, including access to Aon’s global broking centres in London, Singapore and Bermuda and its reinsurance markets via Aon Benfield, the world’s leading reinsurance intermediary. Aon Hewitt will provide the full suite of human capital consulting and outsourcing services.

In terms of the Black Economic Empowerment structure of the new entity, Aon confirms that it envisages that at least 25% of the new shareholding will lie with BEE shareholders.

Subject to the requisite approvals being obtained, detailed strategic and operational planning will be implemented and management structures finalised.

Glenrand M·I·B shareholders are expected to vote on the acquisition in due course and once all approvals are obtained, Glenrand M·I·B will delist from the JSE.