BN Class A Shares to Brookfield Reinsurance A-1 Shares

I’ve never received a letter like this so I wanted to double check I am understanding this correctly.
Brookfield is exchanging their shares of BN into these class A1 non-voting shares of BNRE on a 1:1 basis. This means, on accepting this offer, I would basically be electing to instead hold shares of a BN subsidiary (like BEPC, BAM, etc) rather than their whole organization, Correct?
From your last newsletter, I noticed that BNRE is 100% owned by BN yet the shares are tradable on exchanges so I am also confused by how ownership works.
Finally, as a younger investor with a timeline of 25+ years I feel this trade would not benefit me as I don’t really see a lot of benefit holding a Pension Risk Transfer organization, although I’m not sure I fully understand what they do.
I would really like some of your insight. Thank you.

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Asked on October 17, 2023 6:19 pm

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Private answer

The answer is really one of tax consequences. Since BNRE is a "paired entity" to BN, the exchange offer is structured so that the equity base and market capitalization of BNRE can be enhanced without any dilution to BN or BNRE shareholders.

BNRE issues distributions as return of capital (ROC) and BN as dividends which is the main difference here. So the decision on what to do lies within which you prefer. Personally, I'm keeping my BN shares but after this exchange, I'd expect to shares to diverge. So this is your last chance to get BNRE at a 1:1 basis with BN...that said, I'm sticking with BN. Had my shares been in a non-registered account, I'd might consider BNRE as ROC distributions are more tax efficient.

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Posted by Mathieu Litalien

Answered on October 20, 2023 5:59 am

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I'm also confused by that offer, I looked at my brokerage and BNRE is already available at the same price as BN. Is BNRE was available to buy before that offer? I thought Brookfield reassurance was not available to shareholders because Brookfield had bought back all the shares. Am I right? While staying with BN, would like the change with BAM; BN will hold a portion of BNRE so BN still hold part of BNRE ? Thank you for your help

(Philippe Preville at October 21, 2023 7:38 pm)

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Private answer

Hey there. I'd just like to comment on this question so that it doesn't go unanswered for days. This is a pretty complex situation here that we haven't had the time to dive in fully on yet. However, when we do, we'll likely send something out to members or I'll pop back on and answer it here.

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Posted by Dan Kent

Answered on October 19, 2023 7:51 am

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