The alternative investment manager will nearly double its stake in Athene, which issues, reinsures, and acquires retirement savings products
Apollo Global Management has agreed to acquire an additional 18% stake in US retirement services company Athene in a stock-cum-cash deal worth around $1.55bn.
Following the completion of the deal, the alternative investment manager will increase its stake in the retirement services provider to around 35%.
The deal will strengthen the relationship between the companies. It will also help in eliminating Athene’s current multi-class share structure which is believed to substantially enhance Athene’s index inclusion eligibility and grow its investor base.
Apollo chairman and CEO Leon Black said: “We are tremendously excited to be announcing this strategic transaction, which we believe will meaningfully enhance value for both Apollo and Athene shareholders. Athene and Apollo have developed a special and symbiotic relationship since Athene’s inception a decade ago.
“By nearly doubling our economic interest in Athene to approximately 35%, we are reinforcing the durability of our relationship, and enhancing the strong alignment between the two companies.”
Through its subsidiaries, Athene issues, reinsures, and acquires retirement savings products that are designed for the growing number of individuals and institutions looking to fund retirement needs.
The products offered by the company are retail fixed, fixed indexed and index-linked annuity products, reinsurance arrangements with third-party annuity providers, and institutional products such as funding agreements and group annuity contracts associated with pension risk transfers.
The retirement services company had total assets of $139bn, as of 30 June 2019.
As per the terms of the deal, Apollo will pay $46.2 per share in cash for 7.5 million shares of Athene, which comes to $350m. The alternative investment manager will acquire another 28 million shares in the retirement services company in exchange for 7% stake in its operating group entities, worth around $1.2bn.
Athene CEO comments on the deal
Athene chairman and CEO Jim Belardi said: “This transaction will remove a material impediment to additional index inclusion and strengthen our corporate governance profile by aligning voting rights with the economic interests of all shareholders.
“We believe the combination of these factors will greatly enhance Athene’s appeal to a much broader group of active and passive investors.”
The transaction will be closed after Athene’s shareholder approval, meeting of customary closing conditions and receipt of regulatory approvals.