Apollo Global Completes Strategic Transaction With Athene
Zacks Investment Research | Mar 03, 2020 07:43AM ET
Apollo Global Management (NYSE:APO) and Athene Holding Ltd. (NYSE:ATH) have closed a strategic transaction, which has markedly strengthened both the parties’ relationship and reinforced alignment of interests. The deal was announced in October 2019.
Per the terms, Apollo Global has bought 17% incremental stake in Athene, at a premium, taking its beneficial ownership in the latter to about 34%. In addition, Athene has eliminated its multi-class share structure, which the companies expect will significantly improve its index inclusion eligibility and help expand investor base.
Notably, Apollo Global and its operating group entities have entered into a lock-up agreement restricting transfers of their existing and newly acquired shares of Athene for the next three years. Both companies view their investments as strategic in nature and intend to be long-term holders.
Additionally, the transaction has strengthened Athene’s excess capital base by nearly $1 billion. Also, post competition, both the companies are expected to mutually support each other’s growth.
Leon Black, Chairman and CEO at Apollo Global, said, "Athene and Apollo have developed a special and symbiotic relationship since Athene’s inception more than a decade ago”. He also stated, “In addition, as a result of Athene's new ownership stake in Apollo, which represents its single largest investment, Athene now has a direct economic interest in Apollo's financial success for the first time."
Conclusion
Apollo Global, one of the leading global alternative investment managers, had a balance of asset under management of $322.7 billion as of Sep 30, 2019. The company is aimed at boosting its performance on the back of strategic initiatives, including acquisitions.
In November 2019, Apollo Global entered a deal to acquire Tech Data (NASDAQ:TECD) . Post the deal’s closure, Tech Data will become a private company, with its headquarters at Clearwater, FL.
Shares of the company have jumped 11.7% over the past six months, significantly outperforming 2% growth recorded by the Zacks Investment Research
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