Manchester United Sponsors Aon Relocates Operations from Chicago to London

January 16, 2012

Manchester United shirt sponsors Aon has announced it will move its global headquarters from Chicago to London, saying it wanted greater financial flexibility and accessibility to emerging markets.

The re-insurance broker giant said shifting its global operations base to Britain will give the corporation strategic proximity to British insurance hub Lloyd’s and the London market, as well as step up Aon’s international presence.

“The decisions we make today will help drive our global strategy and strengthen our growth opportunities in the years to come. The continued investment in our international operations and emerging markets is important to the growth of our firm,” Aon CEO Greg Case said in a statement.

London also welcomes the firm. “This is very good news for the London insurance market and for Lloyd’s. It will help reinforce London’s position in the global insurance marketplace,” Lloyd’s market chairman John Nelson told Xinhua Friday.

Included in Aon’s official filing with the Securities and Exchange Commission (SEC), but not in Friday’s press release, was also the publicly-traded company’s expectation to reap more value for its shareholders under a British territorial tax system.

“A reduction in our global tax rate over the long-term, similar to the reduction achieved over the last five years, would allow Aon to remain competitive with certain global competitors,” Aon said in the SEC filing.

The filing also noted that the move would give Aon greater financial flexibility with future free cash flow, as well as access to 300 million U.S. dollars of excess capital held internationally on its balance sheet.

As part of the transaction, which is expected to close in the second quarter of 2012, Aon will also change its corporate jurisdiction from the U.S. state of Delaware to Britain.

This will not be Aon’s first noted public presence in Britain. Since June 2010, the corporation has been the principle sponsor of British Premier League soccer team Manchester United. The team’s jerseys feature the Aon logo as the result of an 80-million-pound four-season deal.

As Chicago will remain Aon’s headquarters for the Americas, the corporation has no plans to lay off its 6,000 workers at the downtown Aon Center, but will instead add 750 jobs there this year, along with 250 elsewhere in the United States, according to the statement.

As one of the largest re-insurance brokers in the world, Aon has a market capital of about 14.8 billion dollars, 61,000 employees worldwide and over 500 offices in more than 120 countries.

Other companies have also said this year they wanted to move their headquarters away from Chicago because of the high business costs in the state of Illinois.

For instance, Chicago Mercantile Exchange and Sears Holdings Corp. decided to stay only after receiving a 371-million-dollar tax break package passed by the Illinois state legislature.

Playboy Magazine also announced today that it would move its headquarters from Chicago to Los Angeles.

However, Aon spokesperson David Prosperi denied a tax motive, telling the Chicago Tribune that Aon was “not doing this for any public policy reasons in Illinois.”