Aquarian Holdings agreed to buy insurer and annuity provider Brighthouse Financial Inc. for $4.1 billion in cash.
The transaction values Brighthouse at $70 a share, Aquarian said in a statement Thursday, or about 35% more than the closing price on Wednesday.
“The acquisition of Brighthouse Financial aligns perfectly with our strategic focus on the United States retirement market, which represents a significant and growing opportunity,” Aquarian Managing Partner Rudy Sahay said in the statement.
In recent years, private equity firms have been acquiring U.S. life insurers to tap their stable capital and bolster their own investment capabilities. That strategy has allowed insurers to benefit from higher yields, while helping alternative-asset managers diversify their earnings with new streams of fees.
Apollo Global Management Inc. led the way with the acquisition of Athene, and peers quickly followed suit. The deal struck by Aquarian — which is both an asset manager and insurer — shows that new entrants are constantly looking for ways to replicate that model.
Founded in 2017 by Guggenheim Partners alum Sahay, Aquarian has grown via a string of acquisitions of life insurers, starting with Kentucky’s Investors Heritage Life Insurance Co.
Brighthouse is more than nine times the size of Aquarian in terms of assets. The companies said the receipt of financing by Aquarian “is not a condition precedent to the completion of the transaction.” The deal is expected to be completed in 2026, according to the statement.
“We believe this transaction will deliver clear and compelling value to our stockholders,” Brighthouse Chief Executive Officer Eric Steigerwalt said in the statement.
Brighthouse shares surged about 27% to $65.79 at 9:58 a.m. Thursday in New York trading.
Charlotte, North Carolina-based Brighthouse was created in 2017 when MetLife Inc. spun off part of its retail business, an effort to reduce its exposure to financial markets by shedding the majority of its variable annuities.
The complex, capital-intensive nature of these products — which saddled MetLife with massive charges — has deterred potential bidders during the sale process.
(Credit: Daniel Williams/ThinkAdvisor)
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