Canada’s Brookfield Asset Management has agreed to acquire a stake of around 62% in US-based Oaktree Capital Management in a stock-cash transaction worth around $4.8bn.
The balance stake will be owned by Oaktree shareholders, comprising its founders, and some of its management and staff.
While Brookfield focuses on real estate, renewable power, infrastructure and private equity, Oaktree prioritises investments in credit, private equity, real assets and listed equities.
Oaktree has operations in 18 cities and employee strength of more than 950.
Together, the two firms will create an alternative asset manager with nearly $475bn in assets.
The two businesses will retain their operational independence and their brand.
They will remain under the leadership of their existing management team. However, Oaktree co-chairman Howard Marks will have a seat on the Brookfield board.
Oaktree co‑chairman and CIO Bruce Karsh and CEO Jay Wintrob will continue in their existing roles.
Brookfield CEO Bruce Flatt said: “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.”
Brookfield expects the deal to be accretive on a per share basis.
As per the agreed terms of the transaction, Oaktree shareholders will be entitled to receive $49 in cash or 1.0770 Class A Brookfield shares for each share held.
Brookfield will finance the cash portion of the deal through existing cash reserves.
There is also a provision, under which Oaktree’s former employee shareholders can offload their Oaktree holdings to Brookfield from 2022.
The deal is expected to be wrapped up in the third quarter of this year, subject to shareholder and regulatory approvals.
This article has been updated to state Brookfield is acquiring the stake in Oaktree Capital Management (the actual management business), not Oaktree Capital Group