Brookfield Reinsurance has signed a definitive agreement with American Equity Investment Life (AEL) to take full ownership of the latter in a cash and stock deal that values the latter at around $4.3bn.

According to the terms of the agreement, each shareholder of the publicly listed AEL will receive $55 per share.

Reuters, citing Refinitiv data, reported that Canada-based investment firm Brookfield owns a stake of 20% in AEL.

The consideration per share for the remaining stake involves $38.85 in cash and nearly 0.5 of a Brookfield Asset Management class A limited voting share with a value equal to $16.15.

Brookfield Reinsurance said that the per share price represents a premium of 35% to AEL’s undisturbed closing share price on 23 June 2023.

Based in the US, AEL is engaged in offering annuity and life insurance products through its subsidiaries.

The firm focuses on insurance liability driven asset allocation and specialises in alternate, private asset management by partnering with public fixed income asset managers.

AEL president and CEO Anant Bhalla said: “We are pleased to have reached this agreement with Brookfield Reinsurance and believe this transaction provides an excellent outcome for all AEL shareholders, policyholders and other stakeholders.”

Following the closing of the deal, shares of AEL will be delisted from the New York Stock Exchange (NYSE). However, the shares of its series A noncumulative preferred stock as well as series B preferred stock will remain listed on the stock exchange.

Brookfield Reinsurance provides a range of insurance products and services, including life insurance and annuities, personal and commercial property, and casualty insurance through its operating subsidiaries.

Through the deal, the firm aims to continue AEL’s focus on alternative asset strategies.

Brookfield Reinsurance CEO Sachin Shah said: “This transaction represents an important step in the continued growth of our insurance business, further diversifying, and scaling, our insurance capabilities, and is a direct result of the partnership we have developed with AEL since our initial investment in 2020.”

Subject to the approval by AEL shareholders, insurance regulatory approvals, and other customary conditions, the deal is anticipated to close in the first half of 2024.