The company, which will sponsor Manchester United from this season, will pay $50 per Hewitt share – a 41pc premiumon the group’s closing price of $35.40 in New York on Friday.
Mr Fradin said: “We are extremely excited to join forces with another global brand to form the leading human capital services enterprise. Aon and Hewitt share a relentless commitment to our clients and to the associates who serve them.”
The deal is expected to generate $355m in annual cost savings by 2013, through reducing back-office operations and overlapping management duties.
The acquisition is the latest in a wave of consolidations in the advisory and consultancy sector after similar deals between Towers Perrin and Watson Wyatt and JLT and HSBC Actuaries and Consultants. It is also the second large deal Aon has completed in recent years following the acquisition of reinsurance broker Benfield for £935m in 2008.
Greg Case, Aon chief executive, said: “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.”