Aon Aims to Sell U.S. Retirement Business to PE Firm Aquiline

News emerged Thursday that Aon has signed definitive agreements to sell its U.S. retirement business to Aquiline and its Aon Retiree Health Exchange business to Alight.

According to a statement from Aon, the total gross monetary value of the deal is approximately $1.4 billion, and the agreements are intended to “address certain questions raised by the U.S. Department of Justice in relation to the combination with respect to the markets in which these businesses are active.”

In other words, the move is intended to resolve potential future antitrust issues for Aon while it works on its proposal to merge with Willis Towers Watson. According to the statement announcing the new deals, Aon and Willis Towers Watson continue to work toward obtaining regulatory approval in all relevant jurisdictions.

“These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” explains Greg Case, Aon’s CEO. “These are very capable teams that have demonstrated exceptional dedication to our clients and our firm. I want to recognize their contributions and reinforce that we are confident they will have similar opportunities with Aquiline and Alight.”

Retirement industry professionals will recall that this is not the first acquisition Aquiline has made in the space this year. Back in January, the private equity firm acquired a majority stake in SageView Advisory Group. Other well-known private equity firms have been active in the industry as well, including GTCR, which first took a minority stake in CAPTRUST before teaming up with Reverence Capital Partners to acquire Wells Fargo Asset Management.

For context, the proposed combination of Aon and Willis Towers Watson, which was first announced in 2020, is still undergoing regulatory review. In anticipation of potential antitrust scrutiny, Aon and Willis Towers Watson previously announced the divestiture of Willis Re, a set of Willis Towers Watson corporate risk and broking and health and benefits services, and Aon’s retirement and investment business in Germany.

With this latest development, the U.S. retirement business Aquiline will acquire includes approximately 1,000 staff, and the agreement covers U.S. core retirement consulting, U.S. pension administration and the U.S.-based portion of Aon’s international retirement consulting business—along with many individual solutions and tools, including the Aon Pooled Employer Plan (PEP).

The agreement with Aquiline does not include Aon’s non-U.S. actuarial, non-U.S. pension administration or international retirement businesses based outside of the U.S.

Aquiline Capital Partners is a private investment firm based in New York and London that invests in companies across financial services, technology, business services and healthcare. With $6.4 billion in assets under management, the firm has invested in numerous businesses that help people plan and save for retirement.

“The retirement solutions sector is benefitting from an increased focus on long-term investment security and risk management of plans,” says Jeff Greenberg, Aquiline’s Chairman and CEO. “Aquiline’s significant experience across retirement and investments positions us to build on the strong business Aon has created. We look forward to working closely with the clients, management and colleagues of Aon’s U.S. retirement business to create further value for all stakeholders.”

Greenberg notes that all of the announced regulatory divestitures are contingent on the completion of the pending Aon and Willis Towers Watson combination, as well as other customary closing conditions. While Aon and Willis Towers Watson are working toward completing the proposed combination “as soon as possible in the third quarter of 2021,” the completion remains subject to the receipt of required regulatory approvals and clearances, including with respect to United States antitrust laws, as well as other customary closing conditions.