Aon moving headquarters to London
Aon: Tax savings a reason for London move - chicagotribune.com
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Aon: Tax savings a reason for London move
The move of Aon Corp.'s headquarters from Chicago to London is at least partly motivated by U.S. taxes, according to a filing with the Securities and Exchange Commission.
"We expect to drive significant value to shareholders, under a U.K. territorial tax system," the insurance brokerage and consulting firm stated.
Publicly traded Aon said it will see "increasing future cash flows through a significant reduction in our global effective tax rate, due primarily to changes in the geographical distribution of income."
"A reduction in our global tax rate over the long-term would allow Aon to remain competitive with certain global competitors," the company said.
It also said the move would give it access to approximately $300 million of excess capital held internationally on the balance sheet.
Chicago will continue as headquarters of the Americas for Aon. Aon insists that the move won't cause any job losses in Chicago.
Aon also said "the move provides greater access to emerging markets and takes better advantage of the strategic proximity to Lloyd's and the London market as one of the key international hubs of insurance and risk brokerage."
The company has about 6,000 workers in the Chicago area. As part of the restructuring, the company plans to add 1,000 U.S., jobs, and move 750 jobs into the Aon Center downtown, according to an SEC filing. It recently signed a letter-of-intent for a 15-year lease.
"The 750 will come from new jobs created by anticipated growth in the United States and from relocation of individuals in other parts of the country based on their roles and functions," Aon spokesman David Prosperi said.
Only about 20 Aon employees will be moving to London as a result of the company relocation. They include Case.
"We made this decision based the fact that our business is evolving globally," he said. Some Illinois companies have threatened to move their headquarters from Illinois over state income tax issues, but "we are not doing this for any public policy reasons in Illinois."
In its announcement, Aon said it plans to add more than 1,000 jobs across its U.S. operations in 2012 based on continued growth opportunities..
"Chicago is the foundation of one of our most important markets, and as the headquarters of the Americas will continue to be central to the success of the firm," Case said.
The company will change its incorporation from Delaware to England. Shareholders will receive one share of the newly formed English public limited company for each share of common stock if they approve the change.
Each stockholder would receive one Class A share of a newly formed English company in exchange for each share of common stock of Aon. Aon UK expects to be listed on the NYSE. The transaction is expected to close in the second quarter of 2012.
