Deal Boosts Apollo’s Stake to 35%

Apollo Global Management will buy an 18% stake in Athene Holding (NYSE: ATH). The $1.55 billion deal will see Apollo double its stake to roughly 35%. The purchase comprises about 35.5 million common shares.

Athene will also take a 7% stake in Apollo. The companies are using a stock swap for this deal.

Under the terms of the deal, Apollo will also be allowed to add five directors to Athene’s board. The latter firm has a 15-member board, signaling greater control for the private equity giant.

“By nearly doubling our economic interest in Athene to approximately 35%, we are reinforcing the durability of our relationship, and enhancing the strong alignment between the two companies,” Apollo Co-founder Leon Black said in a statement.

Apollo Global Management and Athene Holding

Apollo Global also has 45% voting control over Athene despite its smaller stake. The private equity giant established Athene in 2009. Apollo Global has coveted Athene for its successful stream of fees.

Athene buys and reinsures retirement savings accounts. In 2016, it successfully raised $1.08 billion for its IPO. The success of this reinsurance business saw Apollo rivals attempt to replicate their model and success. Athene takes permanent capital – or money from annuity holders – and invests in credit funds, distressed debt, and buyouts.

“Today’s announcement reflects the strength and strategic nature of our longstanding relationship with Apollo,” said Jim Belardi, Chairman CEO of Athene. “After carefully reviewing Athene’s options to unlock value for shareholders, Athene and Apollo determined it is prudent to eliminate Athene’s multi-class share structure and make other enhancements to the companies’ mutually beneficial relationship.”

“This transaction will remove a material impediment to additional index inclusion and strengthen our corporate governance profile by aligning voting rights with the economic interests of all shareholders. We believe the combination of these factors will greatly enhance Athene’s appeal to a much broader group of active and passive investors,” he added.

Related: Hedge Elliott Management May Join Apollo Global Management to Save EP Energy Corp.