Brookfield Reinsurance Acquires American Equity Investment For $4.3B

Brookfield Reinsurance Ltd BNRE entered into a definitive agreement to acquire all of the outstanding shares of common stock of American Equity Investment Life Holding AEL in cash and stock for ~$4.3 billion.

AEL shareholders will receive $55.00 per AEL share, consisting of $38.85 in cash and 0.49707 of a Brookfield Asset Management Ltd. BAM having a value equal to $16.15.

The proposal represents a premium of 35% to the closing price as of June 23, 2023, and a 42% premium to the 90-day volume-weighted average price for the AEL shares.

"With this transaction we have now deployed or committed over $10 billion of capital since our inception, bringing our total insurance assets to over $100 billion, and we remain on track with our growth targets for the business," commented Sachin Shah, Chief Executive Officer of Brookfield Reinsurance.

Given the complementary nature of AEL's leading fixed annuity business to BNRE's existing platform, the company expects to accelerate growth in collaboration with distribution partners and employees while continuing to meet the needs of its policyholders and other stakeholders.

Brookfield Reinsurance intends to continue AEL's focus on alternative asset strategies and expects BAM will manage a significant portion of AEL's assets. 

Brookfield Reinsurance intends to acquire from Brookfield Corporation BN the shares required to satisfy the non-cash payment promised to AEL shareholders. This will increase BAM's public float by 10%, while BNRE's stake in BAM will decrease from 75% to 73%.

The merger is expected to be completed in the first half of 2024, with AEL shares being delisted from the NYSE and shares of AEL's series A noncumulative preferred stock AELPRA and series B preferred stock AELPRB will remain listed on the New York Stock Exchange.

AEL also agreed to suspend the payment of dividends on its common stock through the closing of the transaction.

Price Action: AEL shares are trading higher by 1.53% at $52.54 on the last check Wednesday.