Aon Plc has initiated a significant US investment-grade debt offering to help fund its planned $17 billion acquisition of USI Insurance Services from private equity firm KKR & Co. The company is expected to sell $13.5 billion in notes as part of the financing package. This bond sale is designed to cover a substantial portion of the acquisition cost.
This debt offering is part of a larger funding strategy for the USI acquisition. In addition to the $13.5 billion in bonds, Aon may also include a $4 billion term loan, according to S&P Global Ratings. The overall deal for USI Insurance Services is valued at $17 billion, which includes USI's net debt.
The acquisition is anticipated to nearly double Aon's debt load and has led to the suspension of share buybacks, shifting the company's focus to debt reduction. S&P Global revised Aon's credit outlook to negative, and Moody's shifted its outlook to stable from positive, citing increased balance sheet pressure and integration risks. Analysts from Piper Sandler, BMO Capital, and Mizuho have lowered their price targets, anticipating earnings dilution through 2027 and accretion not expected until 2028 at the earliest.
