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Brookfield Asset Management Inc. says it has signed a deal to acquire a 19.9% stake in American Equity Investment Life Holding Co., which specializes in selling fixed index annuities.

Under the agreement, Brookfield’s reinsurance and annuity subsidiary, Brookfield Asset Management Partners, will also reinsure up to US$10 billion in American Equity’s annuity liabilities including an initial US$5 billion of existing liabilities and up to an additional US$5 billion of future business.

Brookfield will pay US$37 per share for an initial 9.9% stake in the U.S. company following regulatory approval.

The firm will make a second investment for an additional 10.0% for US$37 per share or the adjusted book value per share, whichever is greater, subject to the finalization of reinsurance agreement terms, regulatory approvals and other closing conditions. It is expected to close in the first half of 2021.

In signing the deal with Brookfield, American Equity rejected a takeover offer from Athene Holding Ltd. and Massachusetts Mutual Life Insurance Co. for US$36 per share.

Brookfield will receive one seat on American Equity’s board following its initial investment.