Investing.com – Brookfield Asset Management agreed to buy a majority stake in Oaktree Capital Group, creating one of the world’s biggest alternative asset managers.
Under the agreement, Brookfield Asset Management (NYSE:BAM) will acquire a 62% stake in Oaktree Capital (NYSE:OAK) in a cash and stock deal worth about $4.7 billion. Brookfield will acquire Oaktree’s class A shares for either $49 per share or 1.077 of its own shares, depending on shareholder choice, representing an 11.8% premium to Oaktree’s closing price on March 12.
The deal would allow Brookfield to diversify its offerings into credit, which makes up more than two-thirds of Oaktree’s assets under management.
“This transaction enables us to broaden our product offering to include one of the finest credit platforms in the world, which has a value-driven, contrarian investment style, consistent with ours,” said Bruce Flatt, chief executive of Brookfield.
The combined companies would boast about $475 billion of assets under management.
Both firms will continue to operate independently under their current brands, but the agreement does give Brookfield the option to take over full ownership of Oaktree by 2029.
Brookfield was down 0.15% for the day, while Oaktree surged 11.8%.