Brookfield has announced its proposal to acquire all outstanding shares of common stock of American Equity Investment Life Holding Company (AEL) not already owned by Brookfield Reinsurance.

The offer includes a cash consideration of $38.85 per AEL share and a number of Brookfield Asset Management Ltd. (BAM) class A limited voting shares, valued at $16.15 based on the 90-day VWAP as of June 23, 2023.

The total consideration amounts to $55.00 per AEL share, subject to adjustment in certain circumstances.

Brookfield Reinsurance plans to acquire the necessary BAM shares from Brookfield Corporation to fulfill the non-cash portion of the offer. This transaction is expected to increase BAM’s public float by approximately 10%, contributing to the broadening of its shareholder base.

Brookfield Corporation’s interest in Brookfield Asset Management will decrease from 75% to around 73%, with no dilution or new issuance of shares for BAM, Brookfield Corporation, or Brookfield Reinsurance shareholders.

In the event that BAM shares are trading below their current value, Brookfield Reinsurance has the option to pay the non-cash consideration in cash instead. The proposed offer represents a 35% premium to AEL’s closing price on June 23, 2023, and a 42% premium to the 90-day VWAP as of the same date.

Brookfield Reinsurance intends to focus on meeting the needs of AEL policyholders and clients while maintaining AEL’s alternative asset strategies. The acquisition would enable AEL to benefit from BAM’s direct origination platforms and asset management capabilities, while retaining its high-quality bias and investment grade focus.

Upon completion of the transaction, Brookfield Reinsurance’s assets under management (AUM) will increase to approximately $100 billion, and BAM’s overall AUM will reach approximately $900 billion through its subsidiaries in asset management, wealth, and insurance.

The proposal presented in the letter is non-binding and serves as an expression of interest. The outcome of the negotiations and the terms of the agreement are yet to be determined.

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