Brookfield Reinsurance (NYSE, TSX: BNRE) and American Equity
Investment Life Holding Company (NYSE: AEL) (“AEL”) today announced
that they have entered into a definitive agreement whereby
Brookfield Reinsurance will acquire all of the outstanding shares
of common stock of AEL it does not already own in a cash and stock
transaction that values AEL at approximately $4.3 billion.
As part of the agreement, each AEL shareholder will receive
$55.00 per AEL share, consisting of $38.85 in cash and 0.49707 of a
Brookfield Asset Management Ltd. (NYSE, TSX: BAM) (“BAM”) class A
limited voting share (“BAM Shares”) having a value equal to $16.15
(based on the undisturbed 90-day volume-weighted average share
price (“VWAP”) of the BAM Shares on June 23, 2023), subject to
adjustment in certain circumstances as described below (the “Merger
Consideration”). The Merger Consideration of $55.00 per share
represents a 35% premium to AEL’s undisturbed closing share price
on June 23, 2023 and a 42% premium to AEL’s 90-day VWAP as of such
date.
Anant Bhalla, President and Chief Executive Officer of AEL,
said, “We are pleased to have reached this agreement with
Brookfield Reinsurance and believe this transaction provides an
excellent outcome for all AEL shareholders, policyholders and other
stakeholders. The significant premium that will be delivered to
shareholders as a result of this transaction is a testament to our
strong performance and AEL’s successful transformation under the
AEL 2.0 strategy into an asset light insurer and asset manager. The
transaction represents an opportunity for AEL shareholders, through
the BAM Shares, to remain invested in a market leading global
alternative asset manager. I couldn’t be more excited about the
potential opportunities for our people and benefits for
policyholders as part of a preeminent global financial
institution.”
David Mulcahy, Non-Executive Chairman of AEL’s board, said, “On
behalf of the entire board, I am incredibly proud of AEL’s
achievements and record of value creation for all stakeholders
under the AEL 2.0 model. Thanks to Anant, the entire management
team and our dedicated employees across our platform for their role
and contributions in achieving this great outcome with Brookfield
Reinsurance.”
Sachin Shah, Chief Executive Officer of Brookfield Reinsurance,
said, “This transaction represents an important step in the
continued growth of our insurance business, further diversifying,
and scaling, our insurance capabilities, and is a direct result of
the partnership we have developed with AEL since our initial
investment in 2020. 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. Brookfield
Reinsurance remains well capitalized and committed to meeting the
needs of its policyholders and clients.”
Jon Bayer, Managing Partner, Brookfield Reinsurance, said,
“Given the complementary nature of AEL’s leading fixed annuity
business to our existing platform, we expect to accelerate growth
in collaboration with our distribution partners and employees while
continuing to meet the needs of our policyholders and other
stakeholders. Under its current leadership, AEL has been
transformed into an innovative, asset light insurer that is
positioned for growth, and we look forward to building on our
successful partnership.”
Following closing, Brookfield Reinsurance expects to maintain
AEL’s headquarters in Des Moines, Iowa and that growth in the AEL
platform over time should increase net jobs in Iowa. Brookfield
Reinsurance also looks forward to supporting the greater Des Moines
area, including through maintaining AEL’s existing charitable
contributions and through Brookfield’s broader charitable
foundation and other charitable initiatives.
Brookfield Reinsurance also intends to continue AEL’s focus on
alternative asset strategies and expects BAM will manage a
significant portion of AEL’s assets. As a result, AEL will gain
access to BAM’s leading direct origination platforms and asset
management capabilities while maintaining its current high-quality
bias and investment grade focus.
Additional Transaction Details
If based on the 10-day VWAP of the BAM Shares (measured five
business days prior to closing of the transaction) (the “BAM Final
Stock Price”), the BAM Shares are trading at a price such that the
aggregate consideration per AEL share would be less than $54.00 per
share, the number of BAM Shares delivered for each AEL Share will
be increased such that the value of the aggregate consideration
delivered for each AEL Share will equal $54.00 and Brookfield
Reinsurance will have the option to pay cash in lieu of some or all
of the share portion of the Merger Consideration. In the event that
the BAM Final Stock Price would result in the aggregate Merger
Consideration per AEL Share being greater than $56.50, the number
of BAM Shares delivered for each AEL Share will be decreased such
that the value of the aggregate consideration delivered for each
AEL Share will equal $56.50.
Brookfield Reinsurance intends to acquire from Brookfield
Corporation (NYSE, TSX: BN) (“BN”) the BAM Shares required to
satisfy the non-cash consideration offered to AEL shareholders.
Subject to this occurring, BAM’s public float will increase by
approximately 10%, which is strategically important as BAM
continues to broaden its shareholder base and BN’s interest in BAM
will decrease from 75% to approximately 73%. Accordingly, there
will be no net new issuance of shares of BAM, BN or Brookfield
Reinsurance and no dilution to BAM, BN or Brookfield Reinsurance
shareholders as a result of this transaction. The cash portion will
be funded from excess liquidity within Brookfield Reinsurance.
The transaction is not subject to any financing condition or
contingency. Each of Brookfield Reinsurance’s and AEL’s boards of
directors unanimously approved the merger agreement.
The merger is expected to close in the first half of 2024,
subject to approval by AEL shareholders and other closing
conditions customary for a transaction of this type, including
receipt of insurance regulatory approvals in relevant jurisdictions
and the expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Upon the closing of the proposed transaction, AEL Shares will be
delisted from the New York Stock Exchange and shares of AEL’s
series A noncumulative preferred stock (NYSE:AELPRA) and series B
preferred stock (NYSE:AELPRB) will remain listed on the New York
Stock Exchange.
Under the terms of the merger agreement, AEL has agreed to
suspend the payment of dividends on its common stock through the
closing of the transaction, unless the transaction does not close
by April 4, 2024, in which case the AEL Board may decide to
reinstate the payment of dividends on its common stock.
For further information regarding the definitive merger
agreement, please see AEL’s current report on Form 8-K, which will
be filed with the U.S. Securities and Exchange Commission (the
“SEC”) and will contain a summary of the material terms and
conditions of the merger agreement, as well as a copy of the merger
agreement.
Advisors
Barclays is serving as lead financial advisor to Brookfield
Reinsurance and BMO Capital Markets is also acting as an advisor to
Brookfield Reinsurance on this transaction. Cravath, Swaine &
Moore LLP is serving as legal advisor to Brookfield Reinsurance and
Debevoise & Plimpton LLP is serving as Brookfield Reinsurance’s
insurance counsel.
Ardea Partners and J.P. Morgan are serving as financial advisors
and Sullivan & Cromwell LLP is acting as legal advisor to AEL
on this transaction.
About AEL
At American Equity Investment Life Holding Company, our
policyholders work with over 40,000 independent agents and advisors
affiliated with independent market organizations (IMOs), banks and
broker-dealers through our wholly-owned operating subsidiaries.
Advisors and agents choose one of our leading annuity products best
suited for their clients' personal needs to create financial
dignity in retirement. To deliver on its promises to policyholders,
American Equity has re-framed its investment focus — building a
stronger emphasis on insurance liability driven asset allocation
and specializing in alternate, private asset management while
partnering with world renowned, public fixed income asset managers.
American Equity is headquartered in West Des Moines, Iowa with
additional offices in Charlotte, NC and New York, NY and Miami, FL.
For more information, please visit www.american-equity.com.
About Brookfield Reinsurance
Brookfield Reinsurance Ltd. (NYSE, TSX: BNRE) operates a leading
capital solutions business providing insurance and reinsurance
services to individuals and institutions. Through its operating
subsidiaries, Brookfield Reinsurance offers a broad range of
insurance products and services, including life insurance and
annuities, and personal and commercial property and casualty
insurance. Each class A exchangeable limited voting share of
Brookfield Reinsurance is exchangeable on a one-for-one basis with
a class A limited voting share of Brookfield Corporation (NYSE,
TSX: BN).
For more information, please visit our website at
http://bnre.brookfield.com.
About Brookfield Asset Management
Brookfield Asset Management Ltd. (NYSE, TSX: BAM) is a leading
global alternative asset manager with over $825 billion of assets
under management across renewable, infrastructure, real estate,
private equity, credit and other. We invest client capital for the
long-term with a focus on real assets and essential service
businesses that form the backbone of the global economy. We offer a
range of alternative investment products to investors around the
world — including public and private pension plans, endowments and
foundations, sovereign wealth funds, financial institutions,
insurance companies and private wealth investors. We draw on
Brookfield’s heritage as an owner and operator to invest for value
and generate strong returns for its clients, across economic
cycles.
For more information, please visit our website at
https://bam.brookfield.com.
No Offer or Solicitation
No person has commenced soliciting proxies in connection with
the proposed transaction referenced in this press release, and this
press release is not an offer or a solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities or a solicitation of any vote or approval
in any jurisdiction, in contravention of applicable law, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law.
Cautionary Notice Regarding Forward-Looking
Statements
Except for historical information, all other information in this
press release consists of forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements, and related oral statements AEL,
Brookfield Reinsurance or BAM may make, are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected, anticipated or implied. For example, (1)
conditions to the closing of the proposed transaction may not be
satisfied, (2) regulatory approvals required for the proposed
transaction may not be obtained, or required regulatory approvals
may delay the proposed transaction or result in the imposition of
conditions that could have a material adverse effect on AEL,
Brookfield Reinsurance or BAM or cause certain conditions to
closing not to be satisfied, which could result in the termination
of the merger agreement, (3) the timing of completion of the
proposed transaction is uncertain, (4) the business of AEL,
Brookfield Reinsurance or BAM may suffer as a result of uncertainty
surrounding the proposed transaction, (5) events, changes or other
circumstances could occur that could give rise to the termination
of the merger agreement, (6) there are risks related to disruption
of management’s attention from the ongoing business operations of
AEL, Brookfield Reinsurance or BAM due to the proposed transaction,
(7) the announcement or pendency of the proposed transaction could
affect the relationships of AEL, Brookfield Reinsurance or BAM with
its clients, operating results and business generally, including on
each of AEL’s, Brookfield Reinsurance’s and BAM’s ability to retain
employees, (8) the announcement, pendency or consummation of the
proposed transaction may have negative effects on the market price
of AEL’s common stock or BAM’s class A limited voting shares and/or
AEL’s, Brookfield Reinsurance’s or BAM’s operating results, (9) the
outcome of any legal proceedings initiated against AEL, Brookfield
Reinsurance or BAM following the announcement of the proposed
transaction could adversely affect AEL, Brookfield Reinsurance or
BAM, including their ability to consummate the proposed transaction
and (10) AEL, Brookfield Reinsurance or BAM may be adversely
affected by other economic, business, and/or competitive factors as
well as managements response to any of the aforementioned
factors.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included herein or elsewhere,
including the risk factors included in AEL’s most recent Annual
Report on Form 10-K and Quarterly Report on Form 10-Q, Brookfield
Reinsurance’s Form 20-F, BAM’s Form 20-F and other documents of
AEL, Brookfield Reinsurance or BAM on file with, or furnished to,
the SEC. Any forward-looking statements made in this press release
are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by
AEL, Brookfield Reinsurance or BAM will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, AEL, Brookfield Reinsurance or BAM
or their business or operations. None of AEL, Brookfield
Reinsurance or BAM undertake any obligation to update publicly or
revise any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required
by the federal securities laws. All subsequent written or oral
forward-looking statements attributable to AEL, Brookfield
Reinsurance or BAM and/or any person acting on behalf of any of
them are expressly qualified in their entirety by this paragraph.
References to additional information about AEL, Brookfield
Reinsurance and BAM have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
Additional Information about the Proposed Transaction and
Where to Find It
In connection with the proposed transaction, AEL will file with
the SEC a proxy statement on Schedule 14A that will be combined
with a registration statement filed by BAM on Form F-4 with respect
to the BAM Shares to be issued as part of the proposed transaction
(such combined proxy statement and Form F-4, the “proxy
statement/prospectus”) and AEL, Brookfield Reinsurance or BAM may
file or furnish other documents with the SEC and, in the case of
Brookfield Reinsurance and BAM, with the applicable Canadian
securities regulatory authorities, regarding the proposed
transaction. This press release is not a substitute for the proxy
statement/prospectus (if and when available) or any other document
that AEL, Brookfield Reinsurance or BAM may file with the SEC, or
in the case of Brookfield Reinsurance and BAM, with the applicable
Canadian securities regulatory authorities, with respect to the
proposed transaction. INVESTORS IN AND SECURITY HOLDERS OF AEL ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED OR FURNISHED OR WILL BE FILED OR WILL BE
FURNISHED WITH THE SEC OR APPLICABLE CANADIAN SECURITIES REGULATORY
AUTHORITIES, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND RELATED MATTERS. Investors and security holders may obtain free
copies of the proxy statement/prospectus (if and when available)
and other documents filed with, or furnished to, the SEC or the
applicable Canadian securities regulatory authorities by Brookfield
Reinsurance or BAM through the website maintained by the SEC or
applicable Canadian securities regulatory authorities, as
applicable, at www.sec.gov or www.sedar.com, respectively, or on
Brookfield Reinsurance's or BAM’s investor relations website, as
applicable, at
https://bnre.brookfield.com/reports-filings/regulatory-filings and
https://bam.brookfield.com/reports-filings/regulatory-filings,
respectively. Investors and security holders may obtain free copies
of the proxy statement/prospectus (if and when available) and other
documents filed with, or furnished to, the SEC by AEL through the
website maintained by the SEC at www.sec.gov, on AEL’s investor
relations website at https://ir.american-equity.com/.
Participants in the Solicitation
AEL, Brookfield Reinsurance, BAM and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from AEL’s shareholders in connection with
the proposed transaction. Information regarding AEL’s directors and
executive officers, including a description of their direct
interests, by security holdings or otherwise, is contained in AEL’s
annual proxy statement filed with the SEC on April 28, 2023 and in
other filings with the SEC. A more complete description will be
available in the proxy statement on Schedule 14A that will be filed
with the SEC in connection with the proposed transaction.
Information regarding Brookfield Reinsurance’s directors and
executive officers is contained in Brookfield Reinsurance’s Form
20-F filed on March 31, 2023. Information regarding BAM’s directors
and executive officers is contained in BAM’s Form 20-F filed on
April 3, 2023. You may obtain free copies of these documents as
described in the preceding paragraph filed with, or furnished to,
the SEC. All such documents, when filed or furnished are available
free of charge on the SEC’s website (www.sec.gov), on AEL,
Brookfield Reinsurance or BAM’s respective investor relations
webpages listed above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230704668892/en/
Communications & Media: FGS Global Jared Levy / Robin
Weinberg Email: ael@fgsglobal.com
Investor Relations: Steven D. Schwartz Tel: (515)
273-3763 Email: sschwartz@american-equity.com
Communications & Media: Kerrie McHugh Hayes Tel:
(212) 618-3469 Email: kerrie.mchugh@brookfield.com
Investor Relations: Rachel Powell Tel: (416) 956-5141
Email: rachel.powell@brookfield.com
Communications & Media: Kerrie McHugh Hayes Tel:
(212) 618-3469 Email: kerrie.mchugh@brookfield.com
Investor Relations: Jason Fooks Tel: (212) 417-2442
Email: jason.fooks@brookfield.com
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