Aon Corp. to incur charge in 1st $100 million related to cost of acquiring Alexander & Alexander

Insurance brokerages

December 14, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Aon Corp. said it will take a $100 million charge during the

first quarter of 1997 for expenses related to the acquisition of Alexander & Alexander Services Inc.

Aon spokeswoman Joan Steel would not say yesterday how much of the charge is expected to pay for severance payments to workers who will lose their jobs because of the merger. That is an especially ticklish question in Owings Mills, where Alexander & Alexander has most of its administrative operations.

Analysts have said many Owings Mills departments probably do the same things as departments that already exist at Aon.

"There are some redundancies at the corporate level that we have yet to identify, but which we are working on as we speak," Steel said. "The $100 million we referred to is really looking at redundancies."

Aon, a Chicago-based commercial insurance brokerage and risk management consulting firm, first disclosed plans for the charge in a conference call with analysts Thursday. Reporters were not allowed to participate in the call, and the company did not return calls until yesterday.

The transaction will make Aon the largest insurance brokerage company in the world, surpassing March & McLennan Cos. Inc., according to A. M. Best Co.

Pub Date: 12/14/96

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