Equitable to Increase AllianceBernstein Stake Using Funds from Reinsurance Deal

Equitable Holdings plans to boost its stake in money manager AllianceBernstein Holding (AB) after securing more than $2 billion in cash through a reinsurance agreement, the company announced Monday.

As part of the deal, Equitable will reinsure approximately 75% of its in-force individual life business with Reinsurance Group of America (RGA), unlocking capital that will be used to support a tender offer for up to 46 million units of AllianceBernstein. The insurer has set an offer price of $38.50 per unit, a 7.8% premium over Friday’s closing price, potentially valuing the transaction at $1.8 billion.

If the tender is fully subscribed, Equitable—already AllianceBernstein’s majority shareholder with a 62% stake—could raise its ownership to as much as 77.5%.

Additionally, the reinsurance transaction will fund $500 million in incremental share repurchases beyond Equitable’s existing buyback programs.

“With this freed-up capital, we have the opportunity to really support our growth strategy, focusing on retirement, wealth management, and asset management,” Equitable CEO Mark Pearson told Reuters.

Should the tender offer succeed, Equitable estimates that asset management would generate approximately 60% of its cash flow—up from just 17% when it was spun off from French insurer AXA in 2018.

The move aligns with a broader industry trend of insurers using reinsurance to free up capital for expansion. Equitable previously sold certain run-off and closed-block businesses to Heritage Life Insurance Company in 2020.

The transaction also reflects the growing convergence of insurance and asset management, with financial firms increasingly integrating complementary services to drive earnings. By leveraging its insurance and money management divisions, Equitable can generate fees throughout the life cycle of its products, from initial distribution to long-term asset management, according to CFO Robin Raju.