Brookfield Reinsurance and American Equity seal $4.3bn acquisition deal

Brookfield Reinsurance has announced a definitive agreement to acquire all remaining shares of common stock in American Equity Investment Life (AEL), in a cash and stock deal valued at roughly $4.3 billion.

The agreement will see each American Equity Investment Life shareholder receiving $55 per share, comprising $38.85 in cash and 0.49707 of a Brookfield Asset Management Ltd. class A limited voting share.

This offer is a 35% premium to American Equity Investment Life’s closing share price on June 23, 2023, and a 42% premium to the 90-day volume-weighted average share price of that date. Once the deal is concluded, Brookfield Reinsurance plans to retain the headquarters of American Equity Investment Life in Des Moines, Iowa. They anticipate that this deal will not only preserve existing jobs but also create new opportunities in the region.

Anant Bhalla — American Equity Investment Life President and CEO 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.”

Moreover, Brookfield Reinsurance is committed to supporting the local area through various charitable contributions and initiatives. The company plans to continue American Equity Investment Life’s focus on alternative asset strategies, granting American Equity access to Brookfield Reinsurance’s direct origination platforms and asset management capabilities.

Subject to approval from American Equity Investment Life’s shareholders and relevant regulatory bodies, the merger is expected to be finalized in the first half of 2024. Post-merger, American Equity Investment Life shares will be removed from the New York Stock Exchange, although its series A noncumulative preferred stock and series B preferred stock will remain listed.

Sachin Shah — Brookfield Reinsurance CEO 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.”