Hewitt Associates is to merge with Aon Consulting to create a new giant consultant.

Following an agreement by both boards of directors, Hewitt will join with the subsidiary of the Aon Corporation, with the aggregate consideration is valued at $50 per Hewitt share, representing a 41 per cent premium to Hewitt’s closing stock price on 9 July 2010. The aggregate fully diluted equity value of the transaction is around $4.9bn, made up of 50 per cent cash and 50 per cent Aon stock.

Aon will integrate Hewitt with its existing consulting and outsourcing operations and operate globally under the Aon Hewitt brand. Chairman and chief executive officer of Hewitt, Russ Fradin, will become chairman and CEO of Aon Hewitt, reporting to CEO of Aon Corporation, Greg Case.

“This agreement reflects our ongoing efforts to ensure that Aon’s associates, capabilities and technology remain at the forefront of our industry, providing distinctive client value,” said Case. “As we continue to grow our business, this merger will give us a broader portfolio of innovative products and services focused on what we believe are two of the most important topics in the global economy today – risk and people.”

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