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Business Combination | 6 Months Ended
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Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Business Combination | 3. Business Combination On January 1, 2022, we completed our merger with Apollo and are a direct subsidiary of AGM. At the closing of the merger, each issued and outstanding AHL Class A common share (other than shares held by Apollo, the Apollo Operating Group (AOG) or the respective direct or indirect wholly owned subsidiaries of Athene or the AOG) was converted automatically into 1.149 shares of AGM common shares and any cash paid in lieu of fractional AGM common shares. In connection with the merger, AGM issued to AHL Class A common shareholders 158.2 million AGM common shares in exchange for 137.6 million AHL Class A common shares that were issued and outstanding as of the acquisition date, exclusive of the 54.6 million shares previously held by Apollo immediately before the acquisition date. The consideration was calculated based on historical AGM’s December 31, 2021 closing share price multiplied by the AGM common shares issued in the share exchange, as well as the fair value of stock-based compensation awards replaced, fair value of warrants converted to AGM common shares and other equity consideration, and effective settlement of pre-existing relationships and other consideration. The following represents the calculation of consideration:
(In millions, except exchange ratio and share price data) | Consideration
AHL common shares purchased | 138 |
Exchange ratio | 1.149
Shares of common stock issued in exchange | 158 |
AGM Class A shares closing price | $ | 72.43 |
Total merger consideration at closing | $ | 11,455 |
Fair value of estimated RSUs, options and warrants assumed and other equity consideration | 699 |
Effective settlement of pre-existing relationships | 896 |
Total merger consideration | 13,050 |
Fair value of AHL common shares previously held by Apollo and other adjustments | 4,554 |
Total AHL equity value held by AGM | 17,604 |
Fair value of preferred stock | 2,666 |
Noncontrolling interests | 2,276 |
Total AHL equity value | $ | 22,546 |
The following represents the calculation of goodwill and fair value amounts recognized:
(In millions) | Fair value and goodwill calculation
Merger consideration | $ | 13,050 |
Fair value of AHL common shares previously held by Apollo and other adjustments | 4,554 |
Total AHL equity value held by AGM | 17,604 |
Assets |
Investments | $ | 176,015 |
Cash and cash equivalents | 9,479 |
Restricted cash | 796 |
Investment in related parties | 33,863 |
Reinsurance recoverable | 4,977 |
VOBA | 3,372 |
Other assets | 6,115 |
Assets of consolidated variable interest entities | 3,635 |
Estimated fair value of total assets acquired by AGM | 238,252 |
Liabilities |
Interest sensitive contract liabilities | 160,241 |
Future policy benefits | 41,482 |
Market risk benefits | 4,813 |
Debt | 3,295 |
Payables for collateral on derivatives and securities to repurchase | 7,044 |
Other liabilities | 2,443 |
Liabilities of consolidated variable interest entities | 461 |
Estimated fair value of total liabilities assumed by AGM | 219,779 |
Identifiable net assets | 18,473 |
Less: Fair value of preferred stock | 2,666 |
Less: Fair value of noncontrolling interests | 2,276 |
Estimated fair value of net assets acquired by AGM, excluding goodwill | 13,531 |
Goodwill attributable to AHL | $ | 4,073 |
As part of pushdown accounting, we recorded the calculated goodwill based on the amount that our AHL equity value to be held by AGM exceeded the fair value of identifiable net assets less the amounts attributable to fair values of preferred stock and noncontrolling interests. Goodwill is primarily attributable to the scale, skill sets, operations, and synergies that can be achieved subsequent to the merger. The goodwill recorded is not expected to be deductible for tax purposes. We also recorded VOBA and other identifiable intangible assets. Other identifiable intangible assets are included in other assets on the condensed consolidated balance sheets, as follows:
Distribution channels |  | These assets are valued using the excess earnings method, which derives value based on the present value of the cash flow attributable to the distribution channels, less returns for contributory assets. Amortization of these assets is on a straight-line basis.
Trade name |  | This represents the Athene trade name and was valued using the relief-from-royalty method considering publicly available third-party trade name royalty rates as well as expected premiums generated by the use of the trade name over its anticipated life. Amortization of this asset is on a straight-line basis.
Insurance licenses |  | Licenses are protected through registration and were valued using the market approach based on third-party market transactions from which the prices paid for state insurance licenses could be derived. These assets are not amortized.
The fair value and weighted average estimated useful life of identifiable intangible assets consists of the following:
| Fair value (in millions) |  | Weighted average useful life (in years)
VOBA | $ | 3,372 |  |  | 7
Distribution channels | 1,870 |  |  | 18
Trade name | 160 |  |  | 20
Insurance licenses | 26 |  |  | Indefinite
Total | $ | 5,428 |  |  |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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