Apollo and Athene to merge in $11bn all-stock deal

Global investment manager Apollo and Bermuda-domiciled Athene Holding have entered into a definitive agreement to merge in an all-stock transaction valuing at approximately $11 billion. The deal would create a $29 billion pro forma market cap entity to be led by incoming Apollo CEO Marc Rowan.

Under the terms of the transaction, each outstanding Class A common share of Athene will be exchanged for a fixed ratio of 1.149 shares of Apollo common stock. Upon closing, current Apollo shareholders will own approximately 76 percent of the combined company on a fully diluted basis, and Athene shareholders will own approximately 24 percent.

Apollo estimates the "substantially accretive" tax-free combination would result in its earnings more than doubling year-on-year.

The deal would also provide a stronger capital base while enhancing products and services, allowing the company to rapidly scale asset and liability origination and broaden its distribution channels.

“We will have total alignment to optimise our strategy and allocate capital efficiently, which will include rapidly scaling our capability to originate attractive risk/reward assets, which are the limiter of growth for both firms," said Apollo co-founder and incoming CEO Rowan.

"We have also created alignment among all our stockholders who will share in the upside of a larger, more liquid company with leading corporate governance. And it further aligns interests with our fund investors, giving us a bigger balance sheet to invest alongside clients in our various fund products,” he added.

Athene will continue to be led by chairman and chief executive Jim Belardi with his current management team and workforce. Belardi stated that its longstanding mutually beneficial relationship with Apollo has already created enormous value for each other, and this business combination would drive "significant strategic and financial benefits in both the immediate and long-term future".

The merger will result in a simpler, more transparent corporate structure for Apollo, with a single class of common stock, and “one share/one vote” to ensure that the voting rights of shareholders align with their economic interests.

Apollo founder and chairman Leon Black said: “The Apollo Athene combination is all about alignment, turbo charging growth initiatives and dramatically enhancing shareholder value. Apollo’s conversion to a simplified structure with a single class of common stock with equal voting rights and empowering the full Board with management responsibility of the business are also two significant steps towards these ends.”

Apollo co-founder Josh Harris added: “This merger is an important and strategic step for our firm’s growth. Unlike mergers with a high degree of execution risk, this union cements the coming together of two firms that have maintained a close partnership for more than a decade. As a firm, we continue to demonstrate leadership, strategic differentiation and superior performance across our investment platform.”

The transaction is expected to close in January 2022.

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