in brief

CHICAGO

Aon buying Hewitt Associates in $4.9 billion transaction

Insurance conglomerate Aon Corp. said Monday it has agreed to buy human resources specialist Hewitt Associates for $4.9 billion in a cash-and-stock deal that would nearly triple the size of its consulting business.

The deal, assuming it is approved by regulators, is the company's biggest ever and dramatically expands its push into human resources consulting worldwide. Aon is the world's largest insurance broker but trails rival Marsh & McLennan Co., whose subsidiaries include Mercer and Oliver Wyman Group, in the size of its consulting business.

Hewitt, based in Lincolnshire, Ill., is one of the world's biggest human resources consulting and outsourcing companies with more than $3 billion in annual revenue and 23,000 employees in 32 countries.

Aon said it will pay $50 per Hewitt share, a 41 percent premium over Hewitt's closing price Friday of $35.40.

That sent Hewitt shares up $11.39, or 32.2 percent, to close at $46.79 Monday. Aon shares fell $2.72, or 7.1 percent, to close at $35.62.

Morningstar analyst Bill Bergman said Aon may have overpaid.

"The transaction reflects the favorable economics of combining commercial insurance brokerage and human resources consulting businesses under one umbrella," he said in a note to investors.

"But we are concerned about the price Aon is paying," he also said.

DENVER

Higher aluminum sales push quarterly profits up for Alcoa

Alcoa Inc. said Monday it posted a second-quarter profit as it sold more aluminum in the commercial vehicles, packaging and construction markets.

The Pittsburgh manufacturing giant reported net income of $136 million, or 13 cents share, for the quarter ending June 30. That reversed a loss of $454 million, or 47 cents a share, a year ago.

Revenue rose 22.4 percent to $5.19 billion from $4.24 billion.

The second quarter results topped estimates from analysts surveyed by Thomson Reuters. They expected net income of 12 cents per share on revenue of $5.05 billion. Shares rose 2.7 percent in after-hours trading.

DETROIT

Corvette owners will get chance to build engines

Corvette owners could soon be revving up an engine they built with their own hands.

General Motors Co. said Monday that buyers who order a 2011 Corvette Z06 or ZR1 can help assemble their cars' high-performance LS7 and LS9 engines. The automaker believes the program is the first of its kind in the industry.

The engines will be built at GM's Performance Build Center in Wixom, Mich., where GM assembles all of its high-performance engines by hand. The facility can assemble up to 15,000 engines per year, GM spokesman Tom Read said.

Read said it will take buyers about six hours to assemble, adjust and clean their engines with the parts provided. A skilled technician will supervise.

The 2011 Corvettes are just going into production and will go on sale soon. Read said the company expects to have customers building their own engines as soon as next month. GM sold 13,934 Corvettes last year, according to AutoData Corp.

GM suggests dealers charge $5,800 for the engine-building program, which doesn't include air transportation but does include one night of lodging. But that's just a fraction of the cost of a Corvette Z06, which starts at around $75,000, or a ZR1, which is more than $100,000.

NEW YORK

Better shipping volume sends CSX profits rising 36 percent

Railroad CSX Corp. said Monday a "dynamic" U.S. economy, combined with an across-the-board improvement in shipping volume and higher prices, drove its second-quarter profit up 36 percent.

CSX, based in Jacksonville, Fla., earned $414 million, or $1.07 per share in the second quarter, compared with $305 million, or 77 cents per share a year earlier.

Excluding some one-time gains and losses, the company reported earnings from continuing operations of $414 million, or $1.07 per share, compared with $282 million, or 71 cents per share, in the same period last year.

Revenue rose 22 percent to $2.66 billion.

Analysts polled by Thomson Reuters, who usually exclude one-time items from their estimates, on average expected a profit of 98 cents per share on revenue of $2.63 billion.

NEW YORK

Weyerhaeuser will distribute $5.6 billion in special dividend

Weyerhaeuser plans to distribute $5.6 billion to shareholders through a special dividend, the company said Monday, a required step in Weyerhaeuser's path to becoming a real estate investment trust.

Company shares jumped more than 8 percent, or $3.04, to $38.88 before the market opened.

Weyerhaeuser, one of the world's largest lumber and wood products companies, has been pressured by investors for years to lower its income tax rate, about 35 percent, by becoming a REIT.

The investment trusts distribute at least 90 percent of their taxable income to shareholders as dividends each year, and then can deduct those dividends from corporate taxable income. REITs often pay no corporate taxes.

The payout, expected on Sept. 1, includes the regular quarterly dividend of approximately $11 million. It will be paid to shareholders as of July 22.

Most of the payout will be in the form of stock. Cash payments are limited to 10 percent of the payout, or $560 million.

The company had about 211.6 million shares outstanding as of April 30.

Weyerhaeuser's board approved its conversion into a REIT in December. Its shareholders approved the change in April.

A company makes a REIT proposal when it files the tax return for the effective year. Weyerhaeuser, based in Federal Way, Wash., plans to officially apply to become a REIT when it files its 2010 tax return in 2011. The status would be effective beginning Jan. 1, 2010.