KKR & Co Inc (KKR) is to acquire the remaining 37% stake of insurance company Global Atlantic Financial Group it doesn’t already own, taking its ownership in the business to 100%. The total cash purchase price is currently estimated to be approximately $2.7 bn.
Since 2021, KKR has served as Global Atlantic’s asset manager, offering access to its global investment and origination capabilities for the benefit of GA’s policyholders. Global Atlantic’s assets under management have grown significantly, up from $72bn in 2020 to $158bn today. As Global Atlantic has grown, it has benefited from the scale of KKR’s asset management businesses in meeting GA’s investment needs while maintaining a focus on risk management and continuing to deliver market-leading returns.
The strategic partnership has proven to be both an important source of capital for Global Atlantic and a driver of international growth, with Global Atlantic leveraging KKR’s global reach to establish new business relationships in Hong Kong, Singapore and Japan.
Under the terms of the agreement, KKR will pay Global Atlantic’s minority shareholders an amount in cash equal to 1.0x Global Atlantic’s book value with certain adjustments. The total cash purchase price is currently estimated to be approximately $2.7 bn. Global Atlantic management is expected to exchange a majority of its Global Atlantic equity interests for KKR equity. KKR will fund the transaction from its balance sheet, which had $23bn of cash and investments as of September 30, 2023.
The transaction, which is expected to close in the first quarter of 2024, is subject to customary closing conditions.
Simpson Thacher & Bartlett LLP and Debevoise & Plimpton LLP acted as legal advisors to KKR and Global Atlantic, respectively. Barclays provided a fairness opinion for Global Atlantic.
