Athene Acquisition: Key Details, Impact, and What Comes Next

Apollo Global Management's acquisition of Athene marks a significant milestone in the financial industry. The merger, valued at $43 billion, combines Apollo's asset management expertise with Athene's retirement services, creating a robust entity poised for accelerated growth and enhanced liquidity. This strategic alignment is expected to attract a broader investor base and generate substantial deployable capital over the next five years.

What Is Athene?

Founded in 2009, Athene is a leading provider of annuity and retirement services. Its core products include Fixed Indexed Annuities (FIAs), Registered Index-Linked Annuities (RILAs), Fixed Annuities, and Immediate Annuities. Athene differentiates itself with high financial strength ratings from agencies like AM Best and Moody's, a comprehensive range of retirement solutions, and a customer-centric approach focused on personalized financial planning. Additionally, Athene is committed to corporate social responsibility and advocacy.

Who Acquired Athene?

Apollo Global Management is a prominent player in the alternative asset management and retirement services industry. The company excels in providing innovative capital solutions and disciplined investment strategies across Credit, Equity, and Real Assets. Through its subsidiary Athene, Apollo offers a comprehensive range of retirement savings products. Known for its leadership in private investment-grade and fixed-income markets, Apollo is committed to driving sustainability and delivering positive outcomes for its clients.

When Was Athene Acquired?

Apollo Global Management completed its acquisition of Athene on January 3, 2022. This merger aligns with a broader industry trend where private equity firms are increasingly acquiring insurance businesses to secure permanent capital. The timing of the acquisition is strategic, positioning Apollo for inclusion in the S&P 500 index and enhancing its market capitalization and liquidity. This move is expected to accelerate growth and provide substantial benefits to shareholders and stakeholders.

Why Was Athene Acquired?

• Market Expansion: The merger significantly enhances Apollo's market presence, positioning it as a leading global solutions provider. The combined entity, now eligible for inclusion in the S&P 500 index, is expected to attract a broader and more diversified investor base. This strategic move allows Apollo to rapidly scale asset and liability origination and broaden its distribution channels.
• Technology Integration: While the press releases do not explicitly mention technology integration, the merger's focus on creating a "fully aligned and capital-efficient model" suggests potential improvements in operational efficiencies. This could involve leveraging advanced financial technologies and analytics to optimize strategy and allocate capital more efficiently.
• Competitive Advantage: The merger creates a stronger capital base, enabling rapid scaling and broader distribution channels. Apollo's early entry into the insurance market and the strategic alignment with Athene provide a competitive edge. The combined entity aims to deliver highly stable and diversified earnings, accelerate growth, and originate high-quality assets for clients, making it a formidable player in the industry.

Acquisition Terms

• Acquisition Price: The merger is valued at approximately $43 billion.
• Payment Method: The transaction was an all-stock deal. Each outstanding Class A common share of Athene was exchanged for a fixed ratio of 1.149 shares of Apollo common stock.
• Key Conditions or Agreements:
  • The transaction is intended to qualify as a tax-free transaction for U.S. federal income tax purposes.
  • Requires approval from shareholders of both Apollo and Athene.
  • Subject to regulatory approvals, including the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
  • The combined company will have approximately 600 million shares of a single class of voting stock entitled to one vote per share.
  • The governance structure includes a Board of Directors led by non-executive Chair Jay Clayton, with a highly qualified, diverse, and two-thirds independent group of directors.
  • Apollo is now eligible for inclusion in the S&P 500 index.

Impact on Athene

The acquisition of Athene by Apollo Global Management has led to significant changes in operations and management. The combined entity, Apollo Global Management, Inc., now operates with two principal subsidiaries: Apollo Asset Management and Athene. Leadership includes Marc Rowan as CEO, Scott Kleinman and Jim Zelter as Co-Presidents of Apollo Asset Management, and Jim Belardi continuing as CEO of Athene. The merger has also resulted in a more robust governance structure, with a diverse, 18-member Board of Directors, two-thirds of whom are independent, ensuring a balanced and strategic oversight.

In terms of product offerings and services, the merger has positioned Apollo to enhance its asset management and retirement services capabilities. The combined entity aims to generate $15 billion of deployable capital over the next five years and more than double its fee-related earnings. Athene's commitment to providing exceptional policyholder service and a comprehensive range of retirement savings products remains unchanged, ensuring continuity for customers. Employee reactions have been generally positive, with the merger not predicated on personnel synergies or cost savings, suggesting stability and growth opportunities for the workforce.

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