Brookfield reinsurance arm offers to buy American Equity in $4.3 bln deal

Canadian investment firm Brookfield's reinsurance arm has offered to buy American Equity Investment Life Holding in a deal valued at nearly $4.3 billion, the annuities provider said on Tuesday. Asset managers and private equity firms have been a conduit for publicly listed companies to exit the stock market at a time when few others are willing to do deals, as companies prioritize cost cuts over mergers and acquisitions.

Canadian investment firm Brookfield's reinsurance arm has offered to buy American Equity Investment Life Holding in a deal valued at nearly $4.3 billion, the annuities provider said on Tuesday.

Asset managers and private equity firms have been a conduit for publicly listed companies to exit the stock market at a time when few others are willing to do deals, as companies prioritize cost cuts over mergers and acquisitions. Brookfield's deal comes months after AEL rejected a nearly $4 billion takeover offer from insurance firm Prosperity Life and its principal shareholder Elliott Investment Management, saying the bid "significantly undervalued" the company.

Brookfield Reinsurance has offered $55 for each share of AEL it does not already own. The offer price marks a 35% premium to AEL's closing price on Friday, before media reports on a possible takeover proposal from Brookfield.

Shares of AEL were up 12% at $50.9 in premarket trading. The stock has lost 1% so far this year, as of last close. Brookfield's offer consists of $38.85 per share in cash and the rest in Brookfield Asset Management limited voting shares.

American Equity provides annuities - an insurance contract customers typically buy for a steady income stream after retiring.