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US: Ares, Kayne Anderson cancel $2.55 billion merger

 |  October 27, 2015

Ares Management and Kayne Anderson Capital Advisors canceled their plan to combine into one of the world’s biggest alternative-asset managers, saying they disagreed on how to do so as the slide in oil prices drives volatility in energy assets.

“While both companies believe in the current investment opportunities in energy, the two companies had different views as to how best to proceed with the business combination in response to the current market conditions in the energy sector,” the Los Angeles-based firms said Tuesday in a statement, without specifying the nature of the disagreement. “After thoughtful discussions, both sides decided it was best not to pursue the transaction at this time.”

The firms, headquartered a block from each other, struck a $2.55 billion agreement in July to merge. The combination would have created one of the largest alternative-asset managers, with more than $110 billion under management.

Ares and some of its executives will invest $150 million in Kayne Anderson’s energy funds, according to the statement. Ares will also reimburse Kayne Anderson $30 million to cover costs related to the transaction. The firms said they will seek ways to collaborate, including by jointly managing large client accounts.

Full content: The Wall Street Transcript

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