Brookfield submits proposal for $4.3bn AEL acquisition

Written by Dan McGrath

28/06/2023

Brookfield Reinsurance has announced a proposal to acquire all of the outstanding shares of common stock of American Equity Investment Life (AEL) not already owned by the company, set at an aggregate consideration of $55 per AEL share.

The company delivered a letter to the board of directors of AEL, setting forth a proposal to acquire these shares.

As consideration for each AEL share, shareholders will receive $38.85 in cash, as well as a number of Brookfield Asset Management (BAM) class A limited voting shares, valued at $16.15, totalling the aggregate amount.

Brookfield Reinsurance intends to acquire Brookfield Corporation’s shares of BAM required to satisfy the non-cash consideration offered to AEL shareholders. As a result, BAM’s public float will increase by around 10%, which is important at a time where the company continues to broaden its shareholder base. Following this, the Corporation’s interest in BAM will decrease by 2% to 73%.

Brookfield Reinsurance will have to pay the cash option for the share portion if the shares of BAM are trading below where they are trading currently. In this circumstance, the company may elect, at its sole discretion, to pay the non-cash consideration in cash instead of utilising the
BAM shares in the transaction.

As a result of the acquisition, Brookfield Reinsurance is set to increase its assets under management to approximately $100bn upon transaction closure, with BAM increasing its overall AuM to approximately $900bn through its asset management, wealth and insurance subsidiaries.

With the proposal currently non-binding, the company will continue to focus on the needs of AEL policyholders and clients whilst delivering high quality customer service.

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