American Equity gets $4.3bn acquisition proposal from Brookfield Reinsurance

American Equity Investment Life (NYSE: AEL), an issuer of fixed index annuities, confirmed today that it has received a $4.3 billion worth acquisition proposal from Brookfield Reinsurance.

Under the terms proposed, Brookfield Reinsurance seeks to acquire all remaining shares of American Equity Investment Life that it doesn’t already possess, offering $55 per share.

The proposal splits the share price into $38.85 in cash and $16.15 per share in Brookfield Asset Management (NYSE, TSX: BAM) Class A limited voting shares, calculated on the unaffected 90-day volume-weighted average price as of June 23, 2023.

It’s highlighted that the number of Brookfield Asset Management shares to be issued at closing is subject to fluctuation. This adjustment will ensure that the aggregate value of the closing consideration lies between $54 and $56.5 per share, grounded on BAM’s stock price shortly before closing.

American Equity Investment Life’s board has granted Brookfield Reinsurance a restricted waiver of its standstill obligation under their current investment agreement, permitting the latter to submit this proposal.

The board stated that it will scrutinize the Brookfield Reinsurance’s proposal in line with its fiduciary duties and in consultation with its independent financial and legal advisors. Until the review is completed, American Equity Investment Life has chosen not to comment further on the proposal.

American Equity Investment Life also emphasized that there is no certainty that an agreement will be reached or on what terms.

At present, no action is required from shareholders, said American Equity Investment Life.

The company has engaged Ardea Partners and J.P. Morgan as financial advisors, with Sullivan & Cromwell LLP serving as its legal advisor.