Acquisitions and Dispositions of Businesses |
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| Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions and Dispositions of Businesses | Acquisitions and Dispositions of Businesses Completed Acquisitions On January 1, 2025, the Company completed the acquisition of 100% of the partnership interests and share capital of Griffiths & Armour, an insurance broker in the United Kingdom. In total, the Company completed 7 acquisitions, 6 within Risk Capital and 1 within Human Capital, during the three months ended March 31, 2025. The Company completed no acquisitions during the three months ended March 31, 2024. The following table includes the preliminary fair values of consideration transferred, assets acquired, and liabilities assumed as a result of the Company’s acquisitions (in millions):
(1)Includes $416 million as of December 31, 2024 of consideration paid into an escrow account related to the acquisition of Griffiths & Armour, which closed on January 1, 2025. (2)Includes Cash and cash equivalents of $33 million and $41 million in funds held on behalf of clients. The results of operations of these acquisitions are included in the Condensed Consolidated Financial Statements as of the respective acquisition dates. The Company’s results of operations would not have been materially different if these acquisitions had been reported from the beginning of the period in which they were acquired. Significant Prior Year Acquisitions On April 25, 2024, the Company acquired 100% of the outstanding equity interests of NFP Intermediate Holdings A Corp. (the “NFP Transaction”) in a cash-and-stock merger for an aggregate U.S. GAAP preliminary purchase price totaling $9.1 billion, including approximately $3.2 billion used to settle indebtedness of NFP and cash consideration to the selling shareholders, and approximately 19 million class A ordinary shares with a fair value of approximately $5.9 billion, based on the Company’s closing stock price on April 25, 2024. In addition, the Company had other adjustments of $3.9 billion for cash and certain assumed liabilities. As part of the NFP Transaction, the Company acquired certain less-than-wholly owned entities, resulting in the recognition of noncontrolling interests which are described further below. The Company financed the NFP Transaction, in part, with the net proceeds from Senior Notes issued on March 1, 2024 totaling to an aggregate amount of $6.0 billion and proceeds from a $2.0 billion delayed draw term loan which was drawn on April 25, 2024. Refer to Note 9 “Debt” for further information. Aon accounted for its business combinations under the acquisition method of accounting. The acquisition method requires the Company to measure identifiable assets acquired and liabilities assumed at their fair values as of the Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill. Determining the fair value of intangible assets acquired requires significant judgements, assumptions, and estimates about future events, which the Company believes are reasonable. Use of different estimates and judgements could produce materially different results. The preliminary fair values of consideration transferred, assets acquired, liabilities assumed, and redeemable and nonredeemable noncontrolling interests are subject to adjustments during the measurement period, where purchase accounting will be finalized in the second quarter of 2025. The following table includes these amounts recognized as a result of the Company’s acquisitions (in millions):
(1)Includes $277 million of funds held on behalf of clients. (2)As of March 31, 2025, the NFP deferred tax liability related to the U.S. has been netted with the Aon deferred tax asset related to the U.S. and presented as a net deferred tax asset on the Consolidated Statements of Financial Position. (3)The fair value of the noncontrolling interests acquired was estimated using a DCF model under the income approach and used estimated financial projections developed by management applying market participant assumptions. The above amounts are considered preliminary and, therefore, the Company may refine estimates and adjust the assets acquired and liabilities assumed over a measurement period, not to exceed one year from the Acquisition Date. Since the Acquisition Date, the Company made measurement period adjustments related to the NFP Transaction which primarily included the following: •An increase in the fair value of customer-related and contract-based intangible assets of $125 million; •A decrease in the fair value of acquired notes receivable of $107 million (recorded within other current assets and other non-current assets); and •A $103 million decrease in deferred tax liabilities primarily as a result of adjustments to state deferred taxes and deferred taxes recorded on other measurement period adjustments; Collectively, these adjustments, along with other insignificant adjustments not described above, resulted in a $106 million decrease to goodwill. The measurement period adjustments had an insignificant impact on Net income for the three months ended March 31, 2025. The purchase price related to the NFP Transaction exceeded the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed and, as a result of the purchase allocation, the Company recorded goodwill of approximately $6.8 billion, which is not deductible for tax purposes. The goodwill recognized is attributable primarily to anticipated growth opportunities and synergies as a result of the NFP Transaction which provides the Company with an expanded presence in the large and fast-growing middle-market. As of March 31, 2025, the company had allocated $2.6 billion of the acquired goodwill to Risk Capital and $4.2 billion of the acquired goodwill to Human Capital. The fair value of the assets acquired and liabilities assumed in the NFP Transaction approximated their carrying values as of the Acquisition Date with the exception of customer-related and contract-based assets, tradename, technology, and contingent consideration obligations. Intangible assets acquired had a weighted average useful economic life of 19 years. Supplemental Pro Forma Combined Information (Unaudited) The following unaudited pro forma combined financial information presents the combined results of operations of the Company as if the NFP Transaction occurred on January 1, 2023. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the NFP Transaction had taken place on the date indicated or of results that may occur in the future (in millions):
The unaudited pro forma financial information is based on historical information of the Company and NFP, along with certain material pro forma adjustments. The material pro forma adjustments primarily consist of (i) incremental amortization expense based on the preliminary fair values of the intangible assets acquired; (ii) interest expense to reflect Aon’s borrowings under the Senior Notes offering and delayed draw term loan; (iii) increased compensation expense relating to the issuance of certain cash and equity plans related to the NFP Transaction; (iv) nonrecurring transaction costs; (v) accounting policy alignment adjustments, and (vi) income tax impact of the aforementioned pro forma adjustments. In addition, the Company reflected pro forma adjustments related to measurement period adjustments. Completed Dispositions The Company completed no dispositions during the three months ended March 31, 2025, and one disposition within Human Capital during the three months ended March 31, 2024. There were no pretax gains or losses recognized related to dispositions for the three months ended March 31, 2025 or 2024. Other Significant Activity On May 1, 2017, the Company completed the sale of its benefits administration and business process outsourcing business (the “Divested Business”) to an entity controlled by affiliates of The Blackstone Group L.P. (the “Buyer”) and certain designated purchasers that are direct or indirect subsidiaries of the Buyer. The Buyer purchased all of the outstanding equity interests of the Divested Business, plus certain related assets and liabilities for a purchase price of $4.3 billion in cash paid at closing and deferred consideration of up to $500 million. During the three months ended March 31, 2025 and 2024, the Company earned $20 million and $82 million, respectively, of deferred consideration from the Buyer and the other designated purchasers, which was recorded in Other income (expense) in the Condensed Consolidated Statements of Income. In total, the Company has earned $104 million in deferred consideration related to this transaction as of March 31, 2025.
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