Brookfield Reinsurance, a capital solutions business that provides insurance and reinsurance services to individuals and institutions, has completed the acquisition of American Equity Investment Life Holding Company (AEL).
The deal, announced in July 2023, was completed in a cash and stock transaction valued at $56.50 per AEL share.
Last year, Brookfield Reinsurance announced it was to acquire AEL, for $4.3 billion, taking the firm’s deployed or committed capital since inception to more than $10 billion.
Brookfield first invested in AEL in 2020 via a strategic partnership which included a reinsurance transaction, completed in October of 2021, the same year the corporation officially launched its reinsurance entity, Brookfield Reinsurance.
In January 2022, Brookfield Re increased its equity stake in AEL, and the company entered into a definitive agreement to acquire all of AEL’s outstanding shares of common stock it does not already own in a cash and stock transaction that values AEL at approximately $4.3 billion.
Then, in June 2023, Brookfield Re announced its intentions to take full ownership of AEL in a letter to the latter’s Board of Directors, which suggested an aggregate consideration of $55.00 per AEL share.
With this transaction, AEL’s leading fixed annuity business bolsters Brookfield Reinsurance’s expanding insurance operations and increases its insurance assets under management to over $100 billion.
Jon Bayer, Managing Partner at Brookfield Reinsurance commented: “We are excited to welcome AEL to our organisation as we continue to grow, diversify and scale our retirement services capabilities.
“AEL’s strong franchise and track record of serving policyholders and distribution partners, coupled with the scale of our existing platform and offerings, will position us well for the next phase of growth.”
Brookfield Reinsurance expects to maintain AEL’s headquarters in Des Moines, Iowa. The firm stated that its growth in the fixed annuity business over time should increase jobs in Iowa and looks forward to supporting the greater Des Moines area.
It also plans to maintain AEL’s existing charitable contributions and through Brookfield’s broader charitable foundation and other charitable initiatives.
Barclays served as lead financial advisor and BMO Capital Markets as advisor to Brookfield Reinsurance on this transaction.
Cravath, Swaine & Moore LLP served as legal advisor to Brookfield Reinsurance and Debevoise & Plimpton LLP served as Brookfield Reinsurance’s insurance legal counsel. Torys LLP served as legal advisor to Brookfield Asset Management.
Ardea Partners and J.P. Morgan served as financial advisors and Sullivan & Cromwell LLP acted as legal advisor to AEL.
