Apollo Global Management agreed to acquire Athene Holding in an all-stock deal valuing Athene at roughly $11 billion, the companies said Monday.
Apollo was already the annuity seller's biggest shareholder, with the firm and related entities owning a 35% stake.
"This is not an investment in an insurance business. This is not a conglomerate. This is the natural outgrowth of two partners," said Apollo co-founder and CEO Marc Rowan on a conference call the companies held Monday. "This is one integrated business."
Mr. Rowan described Athene as "a $2.5 billion asset on (Apollo's) balance sheet that provides no earnings" and said that this merger would correct that.
"This is about excess return, something that is very difficult to find in today's marketplace," Mr. Rowan added. "The limiter of growth is the ability to source assets that provide excess return across the risk-reward spectrum. This is about where the platform can be optimized. This removes all the friction points."
Athene Chairman and CEO Jim Belardi also described the transaction as "the natural, appropriate and logical step" between the two firms on the call.
Apollo established Athene in 2009 and built it into one of the top fixed-annuity providers in the U.S. In 2016, the insurance firm raised $1.1 billion in an initial public offering. Athene has become an essential fixture in Apollo's financial apparatus, and private equity rivals have since sought to build up their own insurance businesses.
There are no planned changes to either firms' platforms or investment processes. Mr. Rowan will continue to oversee the combined company, while Apollo Co-Presidents Scott Kleinman and James Zelter will run the investment firm's business operations and Mr. Belardi will lead the insurers' operations with his current management team and staff.
The deal is expected to close in January 2022, pending shareholder approval and customary regulatory approvals.
Bloomberg contributed to this story.