Brookfield Asset Management said on Wednesday it has agreed to buy a majority stake in Oaktree Capital Group in a deal that will see the resulting combine rival global industry leader Blackstone.
Toronto-based Brookfield will acquire a 62% stake in Oaktree in a cash and stock deal worth roughly $4.7 bn (€4.2 bn), the companies said in a statement.
Together the firms will have about $475 bn of assets under management and $2.5 bn of annual fee-related revenue. Current industry leader Blackstone had $472 bn of assets under management at the end of 2018.
‘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 chief executive Bruce Flatt said.
The decision by Los Angeles-based Oaktree, led by distressed debt investor Howard Marks, to sell a majority stake comes after a sustained period during which its stock has underperformed the broader market.
Following the takeover, both companies will continue to operate as independent businesses, with Marks, Oaktree’s co-chairman, joining Brookfield’s board of directors.
Under the deal, Oaktree shareholders can exchange each of their shares for either $49 in cash or 1.0770 Class A shares in Brookfield. Oaktree shareholders, consisting primarily of the firm’s founders, certain members of management and employees, will own the remaining 38% of the company.
European activities
In Europe, Brookfield AM had €20.8 bn of real estate assets under management at end-2017, ranking it 27th in PropertyEU's Top100 Investors list for that year. Blackstone took 13th place in the ranking with €30.1 bn of assets under management.
According to PropertyEU's research, Blackstone carried out €33 bn of real estate transactions in Europe during 2017, compared with €4.7 bn by Brookfield and €1.89 bn by Oaktree Capital Management.
