Aon is spending $17 billion to buy USI from KKR. That's billion with a B. The kind of money that makes your Robinhood portfolio look like a rounding error in a footnote nobody read.
Insurance brokerage. Let's pause there. These are the people who sell you the thing that sells you the other thing that might pay you back if the first thing fails. They're middlemen for middlemen. Brokers brokering broker deals. It's turtles all the way down, except the turtles are wearing suits and charging fees.
KKR gets to walk away with a number so large it requires its own accountant. Private equity bought a company, waited, and sold it for more. Groundbreaking stuff. Someone alert the journalists.
You know what changes for you? Nothing. Your premiums stay the same. Your deductible stays the same. The guy on the phone who puts you on hold for twenty-seven minutes to tell you your claim was denied still puts you on hold for twenty-seven minutes. But now he works for a company owned by a slightly larger company that paid $17 billion to make that happen.
Retail traders will see this headline and think it means something. They'll draw lines on a chart. They'll check the volume. They'll post in a Discord about consolidation in the insurance sector. Then they'll buy calls on an ETF that doesn't even hold Aon and wonder why they're down 40% by Thursday.
The deal includes debt, by the way. Always does. Nobody actually has $17 billion lying around. They have $4 billion and a really persuasive PowerPoint about synergies.
Aon's stock will move 0.3% on the news, algos will trade it six million times in four seconds, and by Monday everyone will have forgotten this happened. Except the bankers who collected their fees and the KKR partners who just bought their fourth vacation home. You'll still be googling what the f*ck a deductible is.
Photo by on Unsplash
Leave a Comment