Brookfield to acquire a $4.8B stake in Oaktree Capital Management

By Nikita Chaurasia  | Date: 2019-03-15

Brookfield to acquire a $4.8B stake in Oaktree Capital Management
  • With the acquisition, Brookfield aims to compete with industry giants such as the Blackstone Group.
     
  • The deal makes Oaktree the second American alternative-asset manager to carry out such a transaction in recent years.

Brookfield Asset Management Inc., (Brookfield), a Canadian alternative-asset management firm, has reportedly announced the $4.8 billion majority stake acquisition of California-based asset management firm, Oaktree Capital Management (Oaktree).

Reports cite, the deal makes Oaktree the second American alternative-asset manager to carry out such a transaction in recent years. With the acquisition, Brookfield aims to compete with industry giants such as the Blackstone Group.

According to a report by Bloomberg, under the terms of the agreement, Brookfield would be acquiring a 62% majority stake in Oaktree Capital in a cash & stock deal. The two firms would together have over $475 billion worth of combined assets under their management and a fee-related annual revenue of $2.5 billion.

The Chief Executive Officer of Brookfield Asset Management, Bruce Flatt stated that the deal enables the company to significantly broaden its product portfolio to include one of the world’s finest credit platforms, which boasts of a value-propelled contrarian investment style that is consistent with the company’s.

For the record, leading industry player Blackstone boasted of $472 billion worth of assets under its management by the end of 2018. This valuation does not account for the debt, if the debt is counted, assets under Blackstone’s management would be around $650 billion.

As part of the acquisition deal, Oaktree shareholders would be able to exchange their respective shares for either 1.0770 Brookfield Class A shares or for a cash payment of $49 per share. The proposed offer is approximately 12.4% premium of Oaktree Class A shares, as per the latest closing price.

According to reports, the amount to be paid for the Oaktree majority stake would be made 50% in cash and 50% stock.

About Author

Nikita Chaurasia     aeresearch.net

Nikita Chaurasia

An accomplished professional in the field of content development, playing with words comes naturally to Nikita Chaurasia. After completing her post-graduate MBA degree in Advertising and PR, Nikita worked across numerous content-driven verticals, undertaking diverse r...

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