Risk intelligence: How to reliably mitigate transaction risk and secure clean...
Mergers And Acquisitions Solutions_Final
1. Risk. Reinsurance. Human Resources.
Aon Risk Solutions
M&A Solutions | Financial Services & Professions Group
Aon provides solutions and services to assists companies in mitigating risk and human capital
challenges arising from M&A transactions.
Aon complements the work of advisers from other disciplines through the provision of insurance and human capital services which may have
an impact of financial modelling, deal price negotiation and allocation of liabilities between sellers and buyers. Our services go beyond closing,
helping our clients manage and protect their ongoing investment and potential future exits.
Aon Mergers & Acquisitions Solutions
Transferring
Transaction
Risk
Insurance and
Human Capital
Due Diligence
Low-probability
High-severity
Risks
Post-transaction
Risk Needs
Post-transaction
Need
M&A Insurance
Solutions
& Services
Pre-transaction Diligence
Insurance Due Diligence identifies
shortfalls in insurance coverage
that may impact on the assets,
cash flows and profitability of
an investment. Human Capital
Due Diligence includes in-
depth assessment of target’s
(i) compensation policies,
programmes, and structures;
(ii) employee benefits programmes
(statutory and voluntary);
(iii) statutory compliance;
(iv) HR programmes, policies and
structure; and (v) leadership and
culture assessment.
• Structuring Appropriate Insurance Programmes
• Monitoring and Servicing Insurance Programmes
For example, where the target is being carved out
from another company, the target (post-carve out)
will require its own insurance programme and will
not have the same economies of scale which may
exacerbate the cost of insurance. We ensure that our
clients have transparency on the risks and clarity on
how best to transfer these to the insurance market.
Warranty & Indemnity Insurance
Protects either buyer or seller in
an M&A transaction from financial
loss due to breach of the seller’s
representations and warranties
in an SPA. Key characteristics of
W&I Insurance include: reduction
or removal of escrow accounts,
provision of clean exit for sellers,
protection of key relationships
between sellers and buyers with
long term ties and the waiver
of subrogation rights by insurer
except in the case of fraud or wilful
misconduct of the insured.
Human Capital / HR Needs
Our Human Capital
Solutions arm, Aon
Hewitt, works with clients
across the deal spectrum,
providing support to clients
from initial due diligence to
the post-acquisition/merger
integration stage.
Tax and Contingent Liabilities
Tax Liability Insurance can
reduce or completely eliminate a
contingent tax exposure arising
from a company’s treatment of a
transaction, investment or other
tax position where the underlying
legal conclusions may be subject
to future challenge by the tax
authorities. Contingent Liability
Insurance provides insurance
for various specific known risks
such at litigation, product and
environmental risks.
