By Dhirendra Tripathi
Investing.com – American National Insurance stock (NASDAQ:ANAT) rose more than 8% on Monday after Brookfield Asset Management Reinsurance Partners (TSX:BAMR) said it would acquire the provider of life insurance and pension products in an approximately $5.1 billion.
American National stockholders will get $190 in cash for each share, a 1.6% premium to the stock’s current price of $187. The merger is expected to close in the first half of 2022.
Brookfield Reinsurance will fund the deal through committed debt financing of $1.5 billion and equity up to the aggregate merger consideration from Brookfield Asset Management. Equity commitment will be reduced by the amount of debt funded at closing. BAM’s equity commitment will be funded by existing liquidity at the corporate level.
The potential deal comes amid heightened activity in the U.S. insurance market. U.S. insurers are stepping up sales of annuities and other capital-intensive assets amid a surge in interest from new and established private equity buyers hungry to boost the quantum of funds under their management.
Last month, AIG (NYSE:AIG) signed a broad-based deal with Blackstone (NYSE:BX) that included sale of a 9.9% stake for $2.2 billion in its life and retirement business to the private equity giant.
Blackstone will also initially manage $50 billion in assets backing AIG’s life and retirement policies, with that amount increasing to $92.5 billion over six years.
AIG will also sell certain affordable housing assets to Blackstone’s real estate investment trust for $5.1 billion.