Apollo’s $11bn Merger with Athene

By Rahul Mepani, Athean Myat, Suchritha Patlolla, Kevin Hwang and Josh Figueroa (Cornell University), Lucy Chen and Jessica (University of Melbourne)


Overview of the deal

Acquirer: Apollo Global Management (NYSE: APO)

Target: Athene Holding (NYSE: ATH)

Implied Equity Value: $11B

Announcement Date: 8 March 2021

Expected Close Date: January 2022

Acquirer Advisor: Barclays

Target Advisors: Lazard, Houlihan Lokey

Investment manager Apollo Global Management and retirement services company Athene Holding has entered into a definitive agreement to merge in an all-stock transaction. The deal implies an approximate total equity value of $11 billion for Athene, with 1.149 shares of Apollo to be exchanged for each Athene share outstanding. Apollo shareholders will own about 76% of the combined firm at completion, with Athene owning the remaining 24%.

Athene and Apollo have been long-standing strategic partners, with Apollo already the largest shareholder in the annuity seller with a 35% stake. The merger is expected to combine two growth companies that provide high-demand products and services within investment returns and retirement income. Key benefits from the transaction are believed to result from increased coordination and alignment, rather than consolidation. These include the simpler regulatory profile of the combined business, enhanced credit and rating profile, greater share liquidity, and a simpler corporate structure.

The deal will help accelerate the strategic plan of Apollo creating a leading global solutions provider with a solid capital base. It is expected to be highly financially accretive at 68% per share based on 2020 combined after-tax earnings. There have however been concerns raised around the instability and dependence of both companies on each other. Athene currently makes up 40% of Apollo AUM and generates 30% of its fee-related earnings, while Apollo manages 100% of Athene’s assets.

“Coming together in this merger is a logical and exciting next step that will simplify our relationship while driving significant strategic and financial benefits in both the immediate and long-term future.” - Jim Belardi, Chairman and CEO (Athene)

Company Details: (Acquirer - Apollo Global Management)

Apollo Global Management is a leading global alternative investment manager specialising in private equity, credit, and real assets. It raises, invests, and manages funds on behalf of prominent pension, endowment, and sovereign wealth funds, as well as other institutional and individual investors. As of December 31, 2020, the firm had approximately $455 billion total assets under management including $328.6 billion in credit funds, $80.7 billion in private equity, and $46.2 billion in real assets.

Founded in 1990, headquartered in New York City, New York (USA)

CEO: Marc Rowan

Number of employees: 1700

Market Cap: $22.74B (as of 22/04/2020)

EV: $27.82B

LTM Revenue: $2.35B

LTM EV/Revenue: 11.84x

Company Details: (Target - Athene Holding)

Athene Holding is an insurance company that provides retirement savings and institutional services. Its primary service is to provide policyholders preparing for retirement with fixed, multi-year guaranteed, immediate, and other various annuities. Before the announcement, Apollo owned 35% of Athene Holding. As of 2020, the firm $36.79 billion in net premiums and deposits.

Founded in 2009, headquartered in Pembroke, Bermuda

CEO: James R. Belardi

Number of employees: 1350

Market Cap: $10.91B (as of 22/04/2021)

EV: $6.7B

LTM Revenue: $14.76B


LTM EV/Revenue: 0.45x


Price/Book Ratio: 0.58x

Combined Ratio: 110%