Brookfield offers to buy insurer American Equity for $4.3bn
Brookfield has offered to acquire American Equity Investment Life for $4.3bn, making it the latest private capital manager looking to expand in credit investing by adding retirement annuity and life insurance assets.
The AEL board has lifted a “standstill” provision that allows Brookfield to purchase more company shares than the 20 per cent stake it already owns, according to a securities filing on Tuesday. According to a letter from Brookfield addressed to the AEL board of directors in the filing, a definitive deal contract could be signed by the end of this week.
AEL had long been coveted by investment managers as one of the last large “fixed-indexed” annuities merchants whose customer premiums could be invested in complex corporate loans and other fixed-income assets besides traditional bonds. In 2020, AEL had repelled an unsolicited joint bid from Apollo’s Athene unit, which had partnered with MassMutual.
At that time, Brookfield purchased a stake in AEL and entered into a reinsurance pact, which gave the asset manager responsibility for managing billions in AEL customer liabilities.
Bhalla took the helm of AEL in early 2020 and had been implementing a strategy he called “AEL 2.0” in which the company partnered with multiple alternative asset managers to more aggressively invest the funds of customers.
Amid the corporate governance turmoil late last year, AEL faced another unsolicited bid from Prosperity Life, a life insurer owned by Elliott Management. Prosperity dropped that $4bn offer early in 2023 after AEL’s board rebuffed it.
Brookfield last year listed a minority stake in BAM to unlock its public market value and create a currency to make purchases as the asset management industry consolidates.
This story originally appeared on: Financial Times - Author:Antoine Gara
