Aon in Pact to Buy Alexander & Alexander

Aon Corp. said it agreed to acquire Alexander & Alexander Services Inc. for about $1.23 billion, creating a global insurance and risk-consulting powerhouse in a rapidly consolidating industry. Aon, a Chicago-based insurance holding company, said it will pay $17.50 a share, or about $790 million, for Alexander & Alexander’s outstanding common stock. Aon will also pay $437.5 million to holders of the New York insurance broker’s preferred stock. The agreement was approved unanimously by the boards of both companies. Alexander & Alexander’s stock jumped $3 to close at $17.125 and Aon rose $1.25 to close at $17.125, both on the NYSE. Aon said it will begin a cash tender offer for Alexander & Alexander’s common shares no later than Monday.