Business Context and Reporting Period
Brookfield Asset Management Reinsurance Partners Ltd. filed a Form 6-K for August 2021, signed August 9, 2021. The filing concerns a proposed acquisition of American National Group, Inc. by Brookfield through indirect subsidiary Freestone Merger Sub Inc. The filing registrant is identified as Brookfield Asset Management Reinsurance Partners Ltd.; the request metadata refers to Brookfield Wealth Solutions Ltd.
Transaction and Key Financial Terms
- On August 6, 2021, the parties entered into an Agreement and Plan of Merger.
- Each outstanding American National common share would be converted into $190.00 in cash, without interest.
- Total merger consideration is approximately $5.1 billion.
- American National restricted share awards and restricted stock units would generally vest and be converted into cash based on the $190.00 per-share consideration.
- Brookfield Asset Management provided an equity commitment intended to fund the transaction. The commitment may be reduced by debt funded at closing.
- Merger Sub received commitments for a $1.5 billion senior unsecured term loan from Bank of Montreal, BMO Capital Markets Corp. and Royal Bank of Canada.
- The transaction is not conditioned on Brookfield obtaining financing.
Material Changes Versus the Prior Comparable Period
The filing does not provide comparative revenue, earnings, cash flow, margin, balance-sheet, debt, or liquidity data. The material development is the announcement of the proposed acquisition and related financing commitments.
Stockholders representing 59.8% of American National’s outstanding common shares executed written consents approving the merger. Accordingly, no further American National stockholder approval is required.
Conditions, Outlook, Risks and Unusual Items
- Closing remains subject to customary conditions, including required regulatory approvals, the absence of prohibitive laws or injunctions, accuracy of representations and warranties, and compliance with contractual covenants.
- Brookfield’s obligations are also conditioned on the absence of a material adverse effect on American National and the absence of specified burdensome regulatory conditions.
- The merger agreement permits regular quarterly dividends of up to $0.82 per American National common share before completion.
- Either party may generally terminate if the transaction has not closed by May 6, 2022. The outside date may extend to August 6, 2022 if specified antitrust or governmental approval delays remain and other closing conditions are satisfied or waived.
- Under certain termination circumstances, American National may owe Brookfield a $178.5 million termination fee.
- Risks include failure to satisfy closing conditions, delayed or conditioned regulatory approvals, transaction termination, disruption to operations and management attention, employee or client retention issues, litigation, and adverse economic, business, or competitive developments.
- The filing includes a joint press release as Exhibit 99.1 and the merger agreement as Exhibit 2.1.
Investor Verification Items
- Verify the final merger consideration, closing status, and whether the transaction was completed under the stated terms.
- Review regulatory approvals and any conditions or burdensome requirements imposed before closing.
- Confirm the actual mix of equity and debt financing and the resulting post-closing leverage.
- Review the complete merger agreement for termination rights, covenants, conditions, and potential termination fees.
- Obtain financial information for Brookfield and American National from their relevant SEC filings, as this Form 6-K does not provide operating or comparative financial metrics.