AEL Receives $4.3B Acquisition Offer from Brookfield Reinsurance

Brookfield Reinsurance, an arm of Canadian private equity firm Brookfield Asset Management, has made a cash and stock offer for American Equity Investment Life Holding Co. (AEL), valuing the annuity firm at about $4.3 billion.

Brookfield, which already owns 20.38% of the company, is offering $55 per share for the 62.1 million outstanding shares it doesn’t own.

Brookfield bought a stake in AEL in 2020 to help the firm stave off acquisition attempts from competitors. In a Monday letter to American Equity board chair David Mulcahy, Brookfield CIO Sachin Shah wrote that the company wants to close the purchase by Friday.

Iowa-based American Equity confirmed the acquisition proposal on Wednesday, stating it “will have no further comment on the proposal until the Board has completed its review.”

AEL shareholders would receive about 70% of the payment in cash. The rest of the money would come as Brookfield stock.

Toronto-based Brookfield’s offer is significantly stronger than past acquisition deals American Equity’s board rejected. In October 2020, Massachusetts Mutual Life Insurance Co. and Athene jointly offered to buy the company for $36 a share giving it a $3 billion valuation at the time.

Following that offer, American Equity’s board agreed to sell the 20% stake to Brookfield for $37. In December 2022, Prosperity Life, a firm backed by private equity firm Elliott Investment Management, unsuccessfully attempted to buy American Equity for $45 a share.