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After Merger, Apollo and Athene Could Be Eligible for S&P 500 Inclusion

The two firms touted the possibility as a highlight for the deal that values Athene at roughly $11 billion.

Apollo Global Management has merged with Athene, the life insurance giant it helped to create in 2009.  

On Monday, the pair announced that they would merge in a deal that values Athene at approximately $11 billion. The deal is expected to close in January 2022, the announcement said.  

The combined entity will have a market cap of $29 billion, making it eligible for inclusion in the Standard & Poor 500 index, according to the announcement.  

“Athene, Apollo combined is a prime candidate for the S&P 500,” Jim Belardi, Athene chairman and chief executive officer, said during an investor call Monday. “I think it’s going to be a financial juggernaut moving forward.” 

Under the terms of the deal, each class A common share of Athene will be exchanged for 1.149 shares of Apollo common stock, according to the announcement. Apollo shareholders will end up owning roughly 76 percent of the combined company, while Athene shareholders will hold approximately 24 percent.  

The all-stock deal is projected to be tax-free, the investor presentation shows.  

The transaction follows a 2019 deal in which Apollo increased its stake in Athene to 35 percent for $1.55 billion, an announcement from the time shows.

That deal eliminated Athene’s multi-class share structure, which allowed Apollo to have outsized voting power.   

“One of the driving forces of that transaction for Athene was to eliminate the dual share class system we had and be a candidate for the S&P 500,” Belardi said of that deal during the investor call Monday. 

Athene went public in 2016, which is when that multi-class structure was created. Athene and Apollo’s relationship dates back to 2009 when the private equity firm co-founded Athene, according to the insurer’s 2016 S-1 filing.

[II Deep Dive: Does Apollo Need Investors?

Apollo’s investment in Athene has been lucrative: In 2018, Institutional Investor reported that half of Apollo’s revenue was generated by Athene. Other private equity firms have been seeking similar revenue streams, with a Pitchbook analysis from August 2020 showing that Apollo and its competitors are increasingly investing in the insurance business. 

“There’s a tremendous amount of plumbing we’ve dealt with over the past decade to enable us to do this,” Apollo co-founder and incoming CEO Marc Rowan said during Monday’s investment call. 

Rowan is set to succeed Leon Black, who is set to retire by the end of July, as Institutional Investor previously reported.  

At the time of that announcement, Apollo said that an independent review of Black’s previous professional dealings with registered sex offender Jeffrey Epstein concluded that Apollo never had engaged with Epstein. Black paid Epstein a total of $158 million between 2012 and 2017 for work, according to an Apollo regulatory filing at the time.  

In addition to this leadership change, Belardi will continue to lead Athene, while Scott Kleinman and James Zelter will continue to be co-presidents at Apollo. The combined entity will increase its board of directors to 18 members, with four Athene directors expected to join the board, according to the announcement.  

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