Provided by Associated Press

Insurance broker Aon Corp. said Monday it agreed to buy human resources company Hewitt Associates for $4.9 billion in cash and stock to expand its consulting operations.

The insurance broker said it will pay $50 per Hewitt share, a 41 percent premium over Hewitt’s closing price Friday of $35.40. Aon shares closed at $38.34 on Friday.

Aon, based in Chicago, plans to integrate Hewitt with its existing consulting and outsourcing operations and create a new unit, Aon Hewitt, after the deal closes. Russ Fradin, chairman and chief executive officer of Hewitt, will become chairman and CEO of Aon Hewitt.

Aon said it will create an “integration team” lead by Greg Besio, chief adminstrative officer of Aon. The team will include Kristi Savacool, senior vice president of Hewitt Large Markets Benefits Outsourcing; Jim Konieczny, president of Hewitt HR Business Process Outsourcing; Yvan Legris, president of Hewitt Consulting; and Kathryn Hayley, co-chief executive officer of Aon Consulting.

Hewitt, based in Lincolnshire, Ill., is a human resources consulting and outsourcing company.

Aon expects the deal will save $355 million annually beginning in 2013, primarily from reducing back-office areas, management overlap and public company costs and getting more from technology platforms. It said the deal will help earnings in 2011 and 2012.

Hewitt stockholders will receive $25.61 in cash and about 0.64 percent of a share in Aon stock per Hewitt share. The total payment will be $2.45 billion in cash and 64 million shares.

The deal is expected to close by mid-November.

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