American Equity, which specializes in annuities and basic life insurance, will soon be acquired by MassMutual and Athene in a deal valuing the company at $3 billion. Both MassMutual and Athene are life insurance companies.
Last month MassMutual and Athene Holdings offered to buy American Equity for $36 per share in cash. American Equity had a market cap of $2 billion prior to the acquisition and was up over 40% on the announcement.
Under the deal, MassMutual will acquire all of American Equity business i.e. all of its subsidiaries as well as employees. According to the joint proposal MassMutual will reinsure 80% of American Equity to Athene and will retain 20%.