Apollo Global Management agreed to purchase an 18% stake in Athene Holding Ltd. in a deal valued at about $1.55 billion, the companies announced Monday.
Under the deal, Apollo, an alternative investment firm, will acquire about 35.5 million common shares of retirement services company Athene — 7.5 million Athene shares, which will be exchanged for $350 million of cash, valued at $46.20 a share, or a 10% premium over the closing market price on Oct. 25, according to a news release. It will also acquire about 28 million Athene shares for a 2.3% premium for a stake of about 7% in Apollo's operating group entities, valued at about $1.2 billion based on the closing price of Apollo's Class A common shares on Oct. 25.
The deal will bring Apollo's stake in Athene to about 35%, the companies said.
"We are tremendously excited to be announcing this strategic transaction, which we believe will meaningfully enhance value for both Apollo and Athene shareholders," said Leon Black, Apollo chairman and CEO, in the news release. "Athene and Apollo have developed a special and symbiotic relationship since Athene's inception a decade ago. By nearly doubling our economic interest in Athene to approximately 35%, we are reinforcing the durability of our relationship and enhancing the strong alignment between the two companies."
As part of the deal, Apollo will have the right to nominate five directors to Athene's 15-person board. Moreover, Athene will have a single share class structure when the deal closes, which is expected sometime in the first quarter of 2020, Athene spokesman Noah Gunn said in an email.
"This transaction will remove a material impediment to additional index inclusion and strengthen our corporate governance profile by aligning voting rights with the economic interests of all shareholders, said Jim Belardi, chairman and CEO of Athene, in the news release. "We believe the combination of these factors will greatly enhance Athene's appeal to a much broader group of active and passive investors."
Athene had total assets of $139 billion as of June 30, according to the news release. Apollo reported $312 billion in assets under management as of June 30, according to data it released in July.
