8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 30, 2006

AON CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of Incorporation)

1-7933	36-3051915
(Commission File Number)	(IRS Employer Identification No.)

200 East Randolph Street
Chicago, Illinois 60601
 (Address of principal executive offices) (zip code)

(312) 381-1000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01.  Completion of Acquisition or Disposition of Assets.

On November 30, 2006, Aon Corporation (the “Company”) consummated the sale of all of the outstanding equity interests of the Company’s subsidiaries that conduct the Aon Warranty Group (“AWG”) business to TWG Holdings, Inc. (f/k/a Warrior Acquisition Corp.), an affiliate of Onex Corporation.  The consideration received consisted of $710 million in cash, pursuant to the terms of the previously disclosed Purchase Agreement, dated as of June 30, 2006, between the Company and TWG Holdings, Inc. (the “Warranty Agreement”). The final purchase price is subject to a post-closing adjustment based upon the net worth (excluding goodwill) of AWG at the closing compared to a target level of $420,011,470.

The disposition included AWG’s worldwide operations consisting of, among other things, the business of underwriting and administering extended warranties on a wide variety of consumer goods, including automobiles, consumer electronics and major home appliances. AWG also provides consumer credit and other specialty insurance products primarily through automobile dealers.

On November 30, 2006, the Company also consummated the sale of its Construction Program Group (“CPG”) business, a managing general underwriter whose policies were underwritten by the Company’s property and casualty operation, to Old Republic Insurance Company.  The consideration received by the Company consisted of $85 million in cash, and the transaction included the transfer to Old Republic Insurance Company of approximately $330 million of net unearned premium and claims reserves that were on the books of Virginia Surety Company, Inc., which relate to business previously written through CPG.

The description of the Warranty Agreement contained in this Current Report on Form 8-K is qualified in its entirety by reference to the text of the Warranty Agreement, which is incorporated by reference herein from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 3, 2006.

Item 9.01.  Financial Statements and Exhibits.

(b)           Pro Forma Financial Information

The following unaudited, pro forma condensed consolidated financial statements are based on the historical financial statements of the Company and are adjusted to give effect to the November 30, 2006 sale of AWG and CPG. The pro forma consolidated balance sheet as of September 30, 2006 is presented as if the disposition of AWG and CPG had occurred on September 30, 2006.  The pro forma statements of income for the nine months ended September 30, 2006 and the twelve months ended December 31, 2005, December 31, 2004 and December 31, 2003, are presented as if the disposition of AWG and CPG had occurred on January 1, 2003.  The pro forma information does not purport to present the financial position or results of operations of the Company had the transaction and events assumed therein occurred on the dates specified, nor are they necessarily indicative of the results of operations in the future.  The pro forma financial information is based on certain assumptions and adjustments described in the Notes to Pro Forma Financial Information and should be read in conjunction therewith and with the financial statements and related notes included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006 and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

The unaudited pro forma condensed consolidated financial statements of the Company are filed as Exhibit 99.1 hereto and incorporated by reference herein.

(d)           Exhibits

2.1	Purchase Agreement, dated as of June 30, 2006, by and between Aon Corporation and TWG Holdings, Inc. (f/k/a Warrior Acquisition Corp.) (incorporated by reference to Exhibit 10.1 of Aon Corporation’s Current Report on Form 8-K filed on July 3, 2006).*
99.1	Unaudited Pro Forma Condensed Consolidated Financial Statements of Aon Corporation.

* The exhibits and schedules to the Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The registrant will furnish copies of any exhibits or schedules to the Securities and Exchange Commission upon request.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AON CORPORATION
	By:	/s/ David P. Bolger
		David P. Bolger
		Executive Vice President, Chief Financial Officer and Chief Administrative Office
Date: December 6, 2006

3

EX-99.1

Exhibit 99.1

Aon Corporation

Pro Forma Statement of Financial Position

As of September 30, 2006

(unaudited)

(millions)
			Pro Forma			Pro Forma
ASSETS	Historical		Adjustments			Adjusted
Investments
Fixed maturities at fair value	$	2,962	$	—		$	2,962
Short-term investments	3,647		—			3,647
Other investments	463		—			463
Total investments	7,072		—			7,072
Cash	461		795		(2)	1,256
Receivables	8,907		—			8,907
Deferred Policy Acquisition Costs	524		—			524
Goodwill & Other Intangible Assets	4,546		—			4,546
Assets Held for Sale	4,672		(4,672		)(1)	—
Property and Equipment and Other Assets	2,501		(63		)(3)	2,438
TOTAL ASSETS	$	28,683	$	(3,940	)	$	24,743
LIABILITIES AND STOCKHOLDERS’ EQUITY
Insurance Premiums Payable	$	9,332	$	—		$	9,332
Policy Liabilities
Future policy benefits	1,764		—			1,764
Policy and contract claims	1,468		—			1,468
Unearned and advance premiums and contract fees	364		—			364
Other policyholder funds	23		—			23
Total Policy Liabilities	3,619		—			3,619
General Liabilities
General expenses	1,544		60		(4)	1,604
Notes payable and short-term borrowings	2,343		—			2,343
Pension, post-employment and post-retirement liabilities	1,734		—			1,734
Liabilities held for sale	3,976		(3,976		)(1)	—
Other liabilities	763		—			763
TOTAL LIABILITIES	23,311		(3,916		)	19,395
Stockholders’ Equity	5,372		(24		)(5)	5,348
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	28,683	$	(3,940	)	$	24,743

Aon Corporation

Pro Forma Statement of Income

Nine Months Ended September 30, 2006

 (Unaudited)

			Pro Forma			Pro Forma
(millions except per share data)	Historical		Adjustments			Adjusted
Revenue
Brokerage commissions and fees	$	4,852	$	—		$	4,852
Premiums and other	1,423		—			1,423
Investment income	266		—			266
Total revenue	6,541		—			6,541
Expenses
Compensation and benefits	3,344		—			3,344
Other general expenses	1,394		—			1,394
Benefits to policyholders	864		—			864
Depreciation and amortization	166		—			166
Interest expense	99		—			99
Provision for New York and other state settlements	2		—			2
Total expenses	5,869		—			5,869
Income from continuing operations before provision for income tax and accounting change	672		—			672
Provision for income tax	234		—			234
Income from continuing operations before accounting change	438		—			438
Discontinued operations
Income from discontinued operations	92		(79		)(6)	13
Provision for income tax	34		(27		)(6)	7
Income from discontinued operations	58		(52		)	6
Income before accounting change	496		(52		)	444
Cumulative effect of a change in accounting principle, net of tax	1		—			1
Net income	$	497	$	(52	)	$	445
Basic net income per share
Income from continuing operations	$	1.37				$	1.37
Discontinued operations	0.18					0.02
Cumulative effect of a change in accounting principle	—					—
Net income	$	1.55				$	1.39
Diluted net income per share
Income from continuing operations	$	1.29				$	1.29
Discontinued operations	0.17					0.01
Cumulative effect of a change in accounting principle	—					—
Net income	$	1.46				$	1.30
Weighted average number of common shares:
Basic	319.9					319.9
Diluted	345.0					345.0

Aon Corporation

Pro Forma Statement of Income

Twelve Months Ended December 31, 2005

(Unaudited)

				Pro Forma			Pro Forma
(millions except per share data)	Historical			Adjustments			Adjusted
Revenue
Brokerage commissions and fees	$	6,646		$	(180	)(6)	$	6,466
Premiums and other	2,848			(1,089		)(6)	1,759
Investment income	343			(72		)(6)	271
Total revenue	9,837			(1,341		)	8,496
Expenses
Compensation and benefits	4,585			(155		)(6)	4,430
Other general expenses	2,329			(416		)(6)	1,913
Benefits to policyholders	1,551			(599		)(6)	952
Depreciation and amortization	277			(17		)(6)	260
Interest expense	125			—			125
Provision for New York and other state settlements	5			—			5
Total expenses	8,872			(1,187		)	7,685
Income from continuing operations before provision for income tax	965			(154		)	811
Provision for income tax	323			(82		)(6)	241
Income from continuing operations	642			(72		)	570
Discontinued operations
Income from discontinued operations	230			—			230
Provision for income tax	135			—			135
Income from discontinued operations	95			—			95
Net income	$	737		$	(72	)	$	665
Preferred stock dividends	(2		)	—			(2		)
Net income available for common stockholders	$	735		$	(72	)	$	663
Basic net income per share
Income from continuing operations	$	1.99					$	1.77
Discontinued operations	0.29						0.29
Net income	$	2.28					$	2.06
Diluted net income per share
Income from continuing operations	$	1.89					$	1.68
Discontinued operations	0.28						0.28
Net income	$	2.17					$	1.96
Weighted average number of common shares:
Basic	322.5						322.5
Diluted	341.5						341.5

 Aon Corporation

 Pro Forma Statement of Income

 Twelve Months Ended December 31, 2004

 (Unaudited)

				Pro Forma			Pro Forma
(millions except per share data)	Historical			Adjustments			Adjusted
Revenue
Brokerage commissions and fees	$	6,822		$	(231	)(6)	$	6,591
Premiums and other	2,788			(1,046		)(6)	1,742
Investment income	321			(47		)(6)	274
Total revenue	9,931			(1,324		)	8,607
Expenses
General expenses	6,969			(634		)(6)	6,335
Benefits to policyholders	1,516			(576		)(6)	940
Depreciation and amortization	303			(24		)(6)	279
Interest expense	136			—			136
Provision for New York and other state settlements	180			—			180
Total expenses	9,104			(1,234		)	7,870
Income from continuing operations before provision for income tax	827			(90		)	737
Provision for income tax	282			(32		)(6)	250
Income from continuing operations	545			(58		)	487
Discontinued operations
Income from discontinued operations	10			—			10
Provision for income tax	9			—			9
Income from discontinued operations	1			—			1
Net income	$	546		$	(58	)	$	488
Preferred stock dividends	(3		)	—			(3		)
Net income available for common stockholders	$	543		$	(58	)	$	485
Basic net income per share
Income from continuing operations	$	1.70					$	1.52
Discontinued operations	—						—
Net income	$	1.70					$	1.52
Diluted net income per share
Income from continuing operations	$	1.63					$	1.46
Discontinued operations	—						—
Net income	$	1.63					$	1.46
Weighted average number of common shares:
Basic	319.6						319.6
Diluted	336.6						336.6

 Aon Corporation

 Pro Forma Statement of Income

 Twelve Months Ended December 31, 2003

 (Unaudited)

				Pro Forma			Pro Forma
(millions except per share data)	Historical			Adjustments			Adjusted
Revenue
Brokerage commissions and fees	$	6,545		$	(222	)(6)	$	6,323
Premiums and other	2,609			(870		)(6)	1,739
Investment income	310			(41		)(6)	269
Total revenue	9,464			(1,133		)	8,331
Expenses
General expenses	6,569			(522		)(6)	6,047
Benefits to policyholders	1,427			(483		)(6)	944
Depreciation and amortization	307			(28		)(6)	279
Interest expense	101			—			101
Unusual credits - World Trade Center	(14		)	—			(14		)
Total expenses	8,390			(1,033		)	7,357
Income from continuing operations before provision for income tax and minority interest	1,074			(100		)	974
Provision for income tax	396			(35		)(6)	361
Income from continuing operations before minority interest	678			(65		)	613
Minority interest - 8.205% trust preferred capital securities	(36		)	—			(36		)
Income from continuing operations	642			(65		)	577
Discontinued operations
Loss from discontinued operations	(19		)	—			(19		)
Income tax benefit	(5		)	—			(5		)
Loss from discontinued operations, net of tax	(14		)	—			(14		)
Net income	$	628		$	(65	)	$	563
Preferred stock dividends	(3		)	—			(3		)
Net income available for common stockholders	$	625		$	(65	)	$	560
Basic net income (loss) per share
Income from continuing operations	$	2.01					$	1.81
Discontinued operations	(0.04		)				(0.04		)
Net income	$	1.97					$	1.77
Diluted net income (loss) per share
Income from continuing operations	$	1.94					$	1.75
Discontinued operations	(0.04		)				(0.04		)
Net income	$	1.90					$	1.71
Weighted average number of common shares:
Basic	316.5						316.5
Diluted	331.8						331.8

Aon Corporation

Notes to Pro Forma Financial Information

1.Reflects book value of assets and liabilities of AWG and CPG.

2.Reflects cash proceeds received at closing for AWG and CPG.  The proceeds for AWG are subject to a post-closing adjustment as described in Item 2.01 of this report.

3.Reflects the estimated income tax effect of the transactions.

4.Reflects the estimated transaction costs.

5.Reflects the estimated after-tax loss of the transactions and equity-related items.

6.Reflects elimination of the results of operations of AWG and CPG.