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Athene (ATH) to Merge With Apollo (APO) in $11B All-Stock Deal
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Athene has agreed to merge with Apollo Global Management (APO - Free Report) in an $11 billion all-stock deal. The transaction, pending approval, is expected to be completed in January 2022. The combined entity is estimated to be a $29 billion pro forma market cap-company, eligible for inclusion in the S&P 500.
Shares of Athene gained about 6% in yesterday’s session.
Transaction Details
Per the definitive agreement, each outstanding Class A common share of Athene will be exchanged for a fixed ratio of 1.149 shares of Apollo common stock. Thus, post-closing, Apollo will have 76% stake in the combined entity with Athene having remaining 24% control. Apollo, along with some related parties and employees, presently has about 35% stake in the outstanding Athene Class A common shares.
The companies expect the transaction to qualify as a tax-free transaction for U.S. federal income tax purposes so that it will be tax efficient for Athene shareholders.
Transaction Rationale
Athene is a leading retirement services company with total assets of $202.8 billion as of Dec 1, 2020 with operations across the United States, Canada and Bermuda. Apollo is a leading global investment manager with assets under management of approximately $455 billion as of Dec 31, 2020 in credit, private equity, and real assets funds. Thus, the merger will help accelerate asset and liability origination, widen distribution channels and create a leading global solutions provider with solid capital base.
Athene and Apollo already have a longstanding relationship with the former leveraging Apollo’s asset management platform. Athene generates about 40% of asset under management and about 30% of FRE revenues. The association thus implies low integration risk.
The companies estimate the merger to be significantly accretive with combined earnings power. The combined entity will set dividend at $1.60 per share, growing with earnings.
The combined entity will be led by incoming Apollo CEO Marc Rowan while Athene’s CEO Jim Belardi will continue to lead Athene. The 18-member board of directors that is two-thirds independent will have four directors of Athene joining the combined entity’s board of directors.
Share Price
Shares of Athene have rallied 20.1% year to date compared with the industry’s increase of 8.3%. Continued focus on organic and inorganic channels, strategic relationship with Apollo and effective capital deployment measures should help retain the momentum. Athene carries a Zacks Rank #2 (Buy) while Apollo carries Zacks Rank #3 (Hold).
Other Acquisitions in Insurance Space
There have been a host of acquisitions in the insurance space of late, given significant capital availability. Arthur J. Gallagher & Co. (AJG - Free Report) acquired Cain Insurance Services Ltd. to expand its footprint in Atlantic Canada. Assurant (AIZ - Free Report) acquired EPG Insurance to consolidate its presence in the automotive service contract space.
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early. See the 5 high-tech stocks now>>
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Athene (ATH) to Merge With Apollo (APO) in $11B All-Stock Deal
Athene has agreed to merge with Apollo Global Management (APO - Free Report) in an $11 billion all-stock deal. The transaction, pending approval, is expected to be completed in January 2022. The combined entity is estimated to be a $29 billion pro forma market cap-company, eligible for inclusion in the S&P 500.
Shares of Athene gained about 6% in yesterday’s session.
Transaction Details
Per the definitive agreement, each outstanding Class A common share of Athene will be exchanged for a fixed ratio of 1.149 shares of Apollo common stock. Thus, post-closing, Apollo will have 76% stake in the combined entity with Athene having remaining 24% control. Apollo, along with some related parties and employees, presently has about 35% stake in the outstanding Athene Class A common shares.
The companies expect the transaction to qualify as a tax-free transaction for U.S. federal income tax purposes so that it will be tax efficient for Athene shareholders.
Transaction Rationale
Athene is a leading retirement services company with total assets of $202.8 billion as of Dec 1, 2020 with operations across the United States, Canada and Bermuda. Apollo is a leading global investment manager with assets under management of approximately $455 billion as of Dec 31, 2020 in credit, private equity, and real assets funds. Thus, the merger will help accelerate asset and liability origination, widen distribution channels and create a leading global solutions provider with solid capital base.
Athene and Apollo already have a longstanding relationship with the former leveraging Apollo’s asset management platform. Athene generates about 40% of asset under management and about 30% of FRE revenues. The association thus implies low integration risk.
The companies estimate the merger to be significantly accretive with combined earnings power. The combined entity will set dividend at $1.60 per share, growing with earnings.
The combined entity will be led by incoming Apollo CEO Marc Rowan while Athene’s CEO Jim Belardi will continue to lead Athene. The 18-member board of directors that is two-thirds independent will have four directors of Athene joining the combined entity’s board of directors.
Share Price
Shares of Athene have rallied 20.1% year to date compared with the industry’s increase of 8.3%. Continued focus on organic and inorganic channels, strategic relationship with Apollo and effective capital deployment measures should help retain the momentum. Athene carries a Zacks Rank #2 (Buy) while Apollo carries Zacks Rank #3 (Hold).
Other Acquisitions in Insurance Space
There have been a host of acquisitions in the insurance space of late, given significant capital availability. Arthur J. Gallagher & Co. (AJG - Free Report) acquired Cain Insurance Services Ltd. to expand its footprint in Atlantic Canada. Assurant (AIZ - Free Report) acquired EPG Insurance to consolidate its presence in the automotive service contract space.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>