Brookfield Asset Management to buy majority stake in Oaktree Capital

Canadian alternative investment group Brookfield Asset Management has agreed to buy a majority stake in Oaktree Capital Management.

The companies said on Wednesday that Oaktree shareholders will receive either $49 in cash per share or 1.0770 class A Brookfield shares for a 62% interest. This represents a 12.4% premium to the closing price of Oaktree shares on Tuesday.

As part of the deal, which has been unanimously recommended by Oaktree's board of directors, the companies will continue to operate their respective businesses independently, partnering to leverage their strengths, with each one retaining its current brand and management and investments teams.

Together, Brookfield and Oaktree will have around $475bn of assets under management and $2.5bn of annual fee-related revenues, making them one of the leading alternative asset managers.

Brookfield chief executive Bruce Flatt said: "As we continue to strategically grow Brookfield, we are thrilled to be partnering with Oaktree and with its exceptional management team whose credit business is second to none.

"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."

Oaktree's co-chairman, Howard Marks, said: "Our firms share a culture that emphasises both investing excellence and integrity, and the businesses mesh without overlapping or conflicting. The rest of Oaktree management and I are excited about the combination of support and independence we expect. We look forward to having Brookfield's contribution to our ability to serve our clients, and to doing the same for them."

At 1445 GMT, Oaktree shares were up 12% at $48.98 while Brookfield shares were down 0.3% to $45.85.