Broking giant Aon is to move the jurisdiction of the firm’s parent company from the United Kingdom to Ireland in order to remain in the European Union following Brexit.
Aon said in a proxy statement that it will maintain its operating company headquarters at the Leadenhall Building in London, in the heart of EC3, and stressed its commitment to the UK and the “important” London insurance market, which it said “remain unchanged and unrivalled”.
The broker’s relocation will not result in any material change to its current business operations, reporting requirements or listings, Aon said in a statement. However, the broking house said remaining within the European Union single market will “help the firm maintain a stable corporate structure and capital flexibility”.
“The move is expected to drive ongoing shareholder value creation through effective capital management that maximizes return on invested capital.”
“Aon UK has concluded that moving the jurisdiction of incorporation for Aon’s parent company to Ireland from the United Kingdom will, among other things, provide greater certainty around ongoing access to existing US treaties with other EU member countries from which the Aon UK Group derives benefit.”
“Ireland has a sophisticated economy and a stable and well-developed legal system and regulatory regime with many similarities to the United Kingdom.”
“The Aon UK Board believes this strategic plan will allow us to maintain a stable corporate structure and capital flexibility and drive long-term shareholder value.”
In the proxy statement, Aon said the proposed reorganization will require shareholder approval.
If shareholders approve the proposal, existing shareholders will own the same number of ordinary shares in the new Irish entity.
The move of the jurisdiction of incorporation for Aon’s parent company is expected to be completed in the first quarter of 2020.
Yesterday, British prime minister Boris Johnson accepted a Brexit extension until 31 January while ambassadors from the 27 other EU member states approved a “flextension” that could last until January 2020, but which gives the UK the option to leave the EU sooner if its withdrawal agreement has been ratified.
Aon is the latest in a swathe of Brexit-related movements to Ireland from the industry, including (re)insurers Aspen, Axa XL, Beazley, Berkshire Hathaway, Chaucer, Everest Re, North P&I Club, Arch, Fidelis and, most recently, Travelers.