Aon slips after reaching $17 bln deal for insurance brokerage USI

Shares of Aon PLC (AON.N) were down 1.7% at $349.44 in premarket trading on Monday after the company said it will buy insurance brokerage USI Insurance Services in a $17 billion deal from private equity firm KKR (KKR.N).

The deal highlights Aon's efforts to expand its presence in the vast U.S. middle-market insurance segment and bolster its capabilities in the fast-growing excess & surplus (E&S) market.

The company, which has a market capitalization of about $75 billion, expects the transaction to close in the fourth quarter of 2026 and said it anticipates the deal will boost adjusted profit in 2028.

Through Friday's close, Aon's stock was up 0.7% year to date, lagging the S&P 500's (.SPX) 12.7% gain and the S&P 500 Financials index's (.SPSY) 5.9% advance.

The stock recently traded at 17 times expected earnings, versus its five-year average of 20, suggesting it may be undervalued, according to LSEG data. The average rating of 25 analysts is "buy"; the median price target is $410.

KKR and Canadian pension fund CDPQ bought Valhalla, New York-based USI in a $4.3 billion deal in 2017; KKR shares were essentially flat before the bell at $108.70.