Aon will spend $4.9 billion to buy Hewitt Associates in an aggressive bid to leapfrog archrival Marsh and McLennan and create the world’s largest human resource services company.

Aon, in its largest-ever deal, would issue 64 million shares and pay a 41 per cent premium for Hewitt. The deal did not sit well with shareholders who knocked Aon’s stock price down 7.4 per cent to $35.51 on the New York Stock Exchange yesterday.

Aon chief executive Greg Case, who had been eyeing Hewitt for a while, approached Russ Fradin, his counterpart at the HR firm, in early June with an informal offer, starting one-on-one talks that led to the agreement.

Aon, the world’s largest insurance brokerage, announced on Monday a $50 per share offer for Hewitt, consisting of $25.61 in cash and 0.6362 in Aon stock.

The deal comes amid a trend toward consolidation in HR services in the last few years as firms look to cut costs. – (Reuters)