Brookfield Reinsurance (NYSE:BNRE) proposed to acquire American Equity Investment Life Holding (NYSE:AEL) for a combination of stock and cash that totals ~$55.00 per share for AEL in a transaction that would increase Brookfield Reinsurance assets under management by about $100B.
Brookfield Reinsurance intends to continue AEL’s focus on alternative asset strategies and expects Brookfield Asset Management (NYSE:BAM) will manage a significant portion of AEL’s assets. The deal, if completed, would increase BAM’s overall AUM to ~$900B through its asset management, wealth, and insurance subsidiaries.
BNRE is offering to pay $38.85 per share in cash and Brookfield Asset Management (BAM) class A limited voting shares having a value equal to $16.15 based on the unaffected 90-day VWAP as of June 23. The per-share price represents a 35% premium to American Equity Investment’s (AEL) closing price as of June 23, 2023.
As a result of the deal, BAM’s public float would increase by ~10%, which is important to the company as it seeks to broaden its shareholder base. Brookfield Corporation’s (NYSE:BN) interest in BAM would decline to 73% from 75%. There will be no net new issuance of shares of BAM, BN, or BNRE, meaning the transaction won’t dilute the shares of those three companies.
American Equity Investment (AEL) confirmed the receipt of the proposal and said its board will review it. The company has granted Brookfield Reinsurance (BNRE) a limited waiver of BNRE’s standstill obligation under its existing investment agreement with AEL to permit BNRE to make the proposal.
Brookfield Corporation (BN) shares slipped 0.7% in premarket trading.