Brookfield Asset Management Reinsurance Spin-Off

December 1 2020 – US: BAM – $40.55 USD

Brookfield Asset Management is going to spin-off its Reinsurance business (here’s their news release).

This one should be interesting because 1) BAM is interesting 2) there will probably be indiscriminate selling of BAM Re.

Details are scarce for now. Here’s what we know… BAM Re will be distributed to BAM shareholders through a special dividend of $500 million. The mothership (BAM) has about a $75 billion market cap. When there is a mismatch of this size, it’s usually worthwhile to look at the deal.

I don’t understand the structure of the spin-off. BAM is using a similar structure to that of a recent spin-off (Brookfield Renewables Corporation). Something about a “paired” entity and being “structured with the intention of being economically equivalent to the Class A shares of BAM.”

Expect it to be completed in the first-half of 2021. More to follow.