KKR to acquire remaining 37% of Global Atlantic
KKR and insurance company Global Atlantic announced a definitive agreement under which KKR will acquire the remaining 37% of Global Atlantic, increasing KKR’s ownership to 100%.
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 billion. 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 $23 billion 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.
After closing, Global Atlantic will continue to be led by its management team and operate under the Global Atlantic brand.
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 $72 billion in 2020 to $158 billion today. 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.
At the same time, Global Atlantic has been a source of financial success for KKR and a key element of KKR’s growing real estate credit and asset-based financing businesses.
“The strategic partnership we envisioned three years ago has exceeded our expectations. It has been transformative for both businesses and a great cultural fit that has enabled us to contribute to Global Atlantic’s continued strong performance and success, while also being a key driver of growth for KKR. We expect the new ownership structure will foster even closer collaboration, allowing us to fully leverage our complementary strengths and grow faster together. We remain focused on performing through cycles for the millions of clients and policyholders counting on us — with a business model that allows us to compound earnings and value for the very long term while retaining our culture. Today’s announcements are in service of that vision — more fully establishing three avenues for long term sustained growth, further increasing our optimism about the path ahead.” – Joe Bae and Scott Nuttall, co-chief executive officers of KKR.
“We are taking this step because we have demonstrated, over the last three years, that we are stronger together. Being part of KKR has strengthened our position as a leading insurance company and enhanced our ability to deliver compelling solutions for our clients. Moving from a diverse group of shareholders to a single one with KKR clarifies our objectives and allows us to think―and invest―longer term. Although we hope to unlock further value by taking this step in our capital structure, neither our client-first approach nor our investment and risk management framework will change, and the day-to-day experience of our clients and colleagues will feel very much the same as it does today.” – Allan Levine, CEO of Global Atlantic.
