The board of American Equity Investment Life has agreed to move forward on a $55-per-share acquisition offer from Brookfield Reinsurance, an affiliate of Brookfield Corp., a large Canadian asset manager, the companies announced Wednesday.
American Equity helped create the modern U.S. indexed annuity market. It generated $964 million in U.S. individual non-variable annuity indexed annuity sales in the first quarter and had a 4.2% share of sales in that market, according to LIMRA.
Brookfield Re, the would-be buyer, said it intends to keep American Equity's headquarters offices in West Des Moines, Iowa, and increase sales of the company's annuities.
The companies plan to complete the deal by June 30, 2024.
What It Means
Asset managers continue to believe that selling annuities to your clients is an attractive business.
The History
American Equity was founded in 1995. It generated $124 million in operating income in the first quarter on $663 million in revenue, and it ended the quarter with $75 billion in assets.
In 2020, company managers rejected a 2020 $3 billion takeover offer from Athene Holding and Massachusetts Mutual Life.
American Equity used a reinsurance relationship with Brookfield Re to fend off the Athene-MassMutual offer, and the Toronto-based company now controls 20.38% of American Equity's voting shares.
In February, managers rejected a $3.4 billion offer from a company backed by Elliott Investment Management.
Brookfield Re announced the new offer for American Equity last week. Brookfield Corp. has been building up U.S. insurance operations since 2020, and it closed on a $5.1 billion acquisition of American National Group in May 2022.
The Plan
Brookfield Re said it will pay $38.85 in cash and $16.15 in stock from another Brookfield Corp. company, Brookfield Asset Management Ltd., for each American Equity share.
