American Equity’s Partnership With Brookfield Asset Management

American Equity's Partnership With Brookfield Asset Management

Skadden, Arps, Slate, Meagher & Flom LLP advised American Equity Investment Life Holding Company, while Cravath represented Brookfield on the deal. Willkie Farr & Gallagher advised Brookfield on the insurance aspects of the transaction.

American Equity Investment Life Holding Company (NYSE: AEL) has entered into a strategic partnership with Brookfield Asset Management Inc. for the reinsurance of $5 billion of existing liabilities and up to an incremental $5 billion of new sales of American Equity’s IncomeShield or similar fixed index annuity products.

As part of this strategic partnership, Brookfield will acquire a 19.9% ownership interest in the common shares of American Equity. American Equity’s Board has authorized the repurchase of up to $500 million of common shares to be funded with the proceeds of the Brookfield equity investment and cash on hand.

After careful review with the assistance of its financial and legal advisors, American Equity’s Board unanimously determined that Athene and MassMutual’s unsolicited, non-binding proposal made public by Athene on October 1, 2020 is opportunistic, significantly undervalues the Company, and is not in the best interests of American Equity and its shareholders and other stakeholders.

J.P. Morgan and Morgan Stanley & Co. LLC served as financial advisors to American Equity. Ardea Partners served as exclusive financial advisor to American Equity in the Brookfield transaction.

American Equity Investment Life Holding Company, through its wholly-owned subsidiaries, is a leading issuer of fixed index annuities through independent agents, banks and broker-dealers. American Equity Investment Life Holding Company, a New York Stock Exchange listed company (NYSE: AEL), is headquartered in West Des Moines, Iowa.

Brookfield Asset Management is a leading global alternative asset manager with approximately US$550 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. Brookfield owns and operates long-life assets and businesses, many of which form the backbone of the global economy.

The Skadden team advising American Equity on the strategic partnership includes M&A partner Shilpi Gupta (Chicago), M&A and Financial Institutions partner Todd Freed (New York), Capital Markets partner Michael Zeidel (New York), M&A partner Richard Grossman (New York) and Financial Institutions partner Elena Coyle (New York).

The Skadden team advising American Equity on the unsolicited proposal includes M&A partner Shilpi Gupta (Chicago), M&A and Financial Institutions partner Todd Freed (New York) and M&A partner Richard Grossman (New York).

The Cravath team advising Brookfield was led by partners Richard Hall (Picture) and David J. Perkins and includes associates Sanjay Murti and Victoria L. Romvary on M&A matters; and senior attorney Jesse M. Weiss and associate Benjamin G. Joseloff on regulatory matters.

The Willkie team advising Brookfield included partners Gregory Astrachan, Alexander Dye, Elizabeth Bannigan, Leah Campbell and Christopher Peters.

Involved fees earner: Richard Hall – Cravath Swaine & Moore; Benjamin Joseloff – Cravath Swaine & Moore; Sanjay Murti – Cravath Swaine & Moore; David Perkins – Cravath Swaine & Moore; Victoria Romvary – Cravath Swaine & Moore; Jesse Weiss – Cravath Swaine & Moore; Elena Coyle – Skadden Arps Slate Meager & Flom; Todd Freed – Skadden Arps Slate Meager & Flom; Richard Grossman – Skadden Arps Slate Meager & Flom; Shilpi Gupta – Skadden Arps Slate Meager & Flom; Michael Zeidel – Skadden Arps Slate Meager & Flom; Gregory Astrachan – Willkie Farr & Gallagher; Elizabeth Bannigan – Willkie Farr & Gallagher; Leah Campbell – Willkie Farr & Gallagher; Alexander Dye – Willkie Farr & Gallagher; Christopher Peters – Willkie Farr & Gallagher;

Law Firms: Cravath Swaine & Moore; Skadden Arps Slate Meager & Flom; Willkie Farr & Gallagher;

Clients: American Equity Investment Life Insurance Company; Brookfield Asset Management Inc;

Author: Ambrogio Visconti