AEL - Brookfield Reinsurance may soon own American Equity
2023-06-27 16:13:54 ET
American Equity Investment Life Holding ( NYSE: AEL ) ended about 15% up after Brookfield Reinsurance Ltd (TSE: BNRE) said it was willing to buy the annuity provider for $4.3 billion.
Analysts’ view on the Brookfield-AEL deal
The proposal translates to $55 a share, of which, the Canadian investment giant wants to pay $38.85 in cash and the remaining in stock.
According to analysts at Truist Securities, the deal, if it indeed materialises, is unlikely to face antitrust concerns.
Annuity players like AEL are a natural fit for larger asset managers. Given the large number of players in the industry and AEL’s modest market share, there should be no antitrust concerns.
Brookfield expects the acquisition to boost its overall assets under management to about $900 billion. Its shares also ended in the green today.
American Equity is reviewing the proposal
In its press release , American Equity confirmed that its board will review the proposal with advisers and won’t make any further comments until then.
Brookfield, though, wants to sign a definitive agreement by the end of this week. With about a 20% stake, it’s already the largest shareholder in the New York listed firm. In a statement today, the Canadian firm said:
Brookfield Reinsurance intends to continue AEL’s focus on alternative asset strategies and expects Brookfield Asset Management will manage a significant portion of AEL’s assets.
Last December, American Equity rejected a $45 per share unsolicited proposal from Elliott Investment-backed Prosperity Life Insurance Group. Wall Street currently rates it at “overweight”.
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