New York private equity firm Apollo to buy insurance affiliate Athene in $11bn deal

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New York private equity firm Apollo to buy insurance affiliate Athene in $11bn deal

On Monday, Apollo Global Management, the NY-based American multinational alternative investment managing company having offices across North America, Europe and Asia, had issued a statement saying that the private equity firm would merge with Bermuda-based insurance affiliate Athene Holding Ltd in an $11 billion all-stock deal, escorting in-house an insurance affiliate that ushered in the private equity firm to become one of the world’s largest corporate credit investors.

In point of fact, latest merger deal for Athene, which remains as a lucrative source of fresh capitals for Apollo Global Management for more than a decade since Apollo holds a 35 per cent stake in the insurance affiliate and manages a portion of Athene’s assets at its investment platform and credit businesses, came against the backdrop of a persistent underperformance of Athene’s shares since its stock market debut in 2016.

Nonetheless, followed by the reveal of merger deal, NYSE-listed shares’ prices of 31-year-old Apollo Management Co wrapped up the day 4.24 per cent lower to $47.46 apiece, while US-listed stocks of Bermuda-headquartered insurance affiliate Athene Holding leapfrogged just a notch shy of 6 per cent to $51.80 per share.

Apollo agrees $11 billion merger deal with insurance affiliate Athene

In factuality, Apollo Global’s $11-billion merger deal for Athene in effect would augment the insurance company’s businesses and assets into the NY-based private equity firm, proffering both parties a potential window of opportunity to enhance earnings potential despite having had an incomplex ownership business model.

Meanwhile, citing an out-and-out optimism over the merger deal, Apollo’s incoming CEO Marc Rowan who had helped set up the insurance company back in the 2009s, said in a call with the analysts, “This transaction is about coordination, not consolidation.

There is no plan to consolidate the businesses. There is no need to consolidate the businesses”.