Aon Corp. today announced it has agreed to sell Aon Warranty Group, one of the world’s largest providers of extended warranty contracts, to Onex Partners, an affiliate of Toronto-based Onex Corp., for for approximately $800 million (US$710 million).

Among the Aon Warranty businesses to be sold to Onex is Virginia Surety Co.

The sale is subject to regulatory and other approvals, and is expected to close in the fourth quarter of 2006.

Aon Warranty operates in 19 countries through more than 2,150 employees. It underwrites and administers extended warranties on a wide variety of consumer goods, including automobiles, consumer electronics and major home appliances. It also provides consumer credit and other specialty insurance products primarily through automobile dealers.

“This is a terrific opportunity to acquire a business with a long track record of consistent growth, a broad and diverse customer base and a talented and highly experienced management team,” said Robert Le Blanc, an Onex managing director. “We will work with AWG’s management team to grow the business and to pursue a variety of attractive opportunities to expand its product offerings, distribution channels and geographic reach.”

“We are delighted to join Onex as a partner that shares our enthusiasm to expand and improve our business,” said David Cole, chairman and CEO of Aon Warranty. “We have enjoyed tremendous support within the Aon organization over the years and are looking forward to developing an equally successful relationship with Onex.”

The anticipated equity investment of approximately $575 million will be made through Onex Partners, Onex’ large-cap private equity funds, and will also include a significant investment by AWG’s senior management team. Onex currently expects that its portion of the investment will be approximately $185 million.