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Apollo to Acquire Athene Through $11B Deal

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What You Need to Know

  • Apollo already had a close relationship with Athene.
  • Athene is reinsuring $27 billion in Jackson liabilities.
  • Apollo says Athene would keep its current management.

Apollo Global Management Inc. is moving to gain full control over Athene Holding Ltd., a large life insurer.

The companies announced Monday that they have agreed to merge by swapping stock, through a transaction that implies a $11 billion total value for Athene. The combined company would have a market capitalization, or total stock value, of $29 billion. The companies hope to complete the deal in January 2022.

Under the agreement, Apollo shareholders would end up owning 76% of the combined company, and Marc Rowan, Apollo’s incoming CEO, would be the leader of the combined company, according to Apollo.

A special committee of “certain disinterested members” of the Athene board and the conflicts committee of the Apollo board have approved the merger unanimously. The Apollo and Athene boards have also approved the merger, Apollo said.

The Apollo representatives on the Athene board recused themselves from discussions about the merger, Apollo said.

About Apollo and Athene

Apollo is a New York-based investment company that already has 45% of the voting power of Athene’s stock, and big investments in many other companies.

Just this week, Apollo announced plans to acquire the The Michaels Cos. arts and crafts store chain and The Venetian Resort and Sands Expo and Convention Center in Las Vegas.

Athene is the Hamilton, Bermuda-based company that worked with Venerable to acquire a $19 billion block of fixed and indexed annuities from Voya Financial through a reinsurance arrangement in June 2018, and a $27 billion block of traditional fixed annuity and indexed annuity liabilities from Jackson, the U.S. arm of Prudential PLC of London, in June 2020.

After the Deal

Apollo said Monday in the deal announcement that Apollo and Athene would continue to operate as separate companies under their current managers.

Jim Belardi, Athene’s CEO, would continue to lead Athene, “with his current management team and full workforce,” Apollo said. “There will be no change to Athene’s platform, investment processes or approvals.”

Scott Kleinman and James Zelter, the current co-presidents of Apollo, would lead Apollo’s operations, the company said.

Apollo added that having a closer relationship should be good for both companies. The stronger capital base should help Apollo expand more quickly and it should also help the combined company broaden distribution channels, Apollo said.

“The key benefits of the merger will be derived from increased coordination and alignment, not consolidation,” Apollo said. “The merger is not predicated on synergies of personnel or cost savings, and the combined company expects to grow its workforce commensurate with growth of the business. There will be no change to the platform, day-to-day portfolio management or investment processes and approvals.”

Belardi, in his comment, said the Apollo-Athene deal reflects the strength and strategic nature of the company’s relationship with Apollo. ”Coming together in this merger is a logical and exciting next step that will simplify our relationship while driving significant strategic and financial benefits in both the immediate and long-term future.”

One investor and securities analyst criticism of Apollo has been that Apollo has had a complicated share structure. After the Athene deal is completed, Apollo will have a simplified structure, with a single class of voting stock and equal voting rights for each share, which should make it eligible to join the S&P 500, Apollo said.

Athene executives and employees at the New York Stock Exchange, Dec. 9, 2016 — the day Athene went public. (Photographer: Michael Nagle/Bloomberg)