Insurance broker Aon (AON) could hit rewind on one of its key moves last year. The British-American firm is in late-stage negotiations to resell its NFP wealth management business back to U.S. private equity giant Madison Dearborn, for $2.7 billion, the Financial Times reported, citing two people familiar with the matter.
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Aon’s shares are down by 0.10% to $371.60 as of 4:59a.m EDT in pre-market trading activities on Wednesday morning. The stock closed Tuesday’s U.S. trading session 1.35% higher to reach $371.96.
Aon acquired the wealth manager from Madison Dearborn for $13 billion about a year ago. NFP includes private wealth subsidiaries Wealthspire Advisors, Fiducient Advisors, and Newport Private Wealth. These firms together oversee about $60 billion in client assets. They also advise on an additional $500 billion, contributing about 20% to NFP’s total net income.
Aon to Retain Legacy Wealth Consulting Business
However, Aon has decided to let go of its non-core assets and instead double down on its investments in artificial intelligence. The London-based company also wants to focus on its key areas of operations: insurance, human resources advisory, and health brokerage.
It is important to note, however, that Aon is not offloading its legacy wealth consulting business. The insurance broker will continue to offer its advisory services to institutional clients such as pension funds, endowments, and corporations.
Madison Dearborn beat private equity rivals CVC, KKR (KKR), and Stone Point Capital to clinch the deal. The American private equity buyout pioneer intends to fund the transaction with almost $1.5 billion in equity and another $1 billion in debt. It will be advised by the top investment banks, Goldman Sachs (GS) and UBS (UBS), on the deal.
Before the sale of NFP to Aon, Chicago-based Madison Dearborn forged the company into a wealth management powerhouse through over 300 acquisitions. However, it sold it to Aon last year in one of the sector’s top deals.
Is AON a Good Stock to Buy?
Turning to Wall Street, Citi’s (C) analyst Matthew Heimermann has a Hold rating on Aon, maintaining its price target of $402.00. The analyst noted that while Aon is seeing an increase in capital market activity, the impact on earnings per share in 2026 and beyond remains limited.
Also, Morgan Stanley (MS) recently stuck to its Hold rating for Aon’s stock, putting forward a price target of $385.00. However, on TipRanks, Aon shares have a Moderate Buy consensus recommendation based on 13 Buy, three Hold, and two Sell ratings by analysts over the last three months.
The average AON price target of $416.56 represents almost 12% upside potential from the shares’ current level.
