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Investment company Brookfield is close to signing a deal to purchase US-based insurer American Equity Investment Life, reported Bloomberg, citing sources.

Brookfield subsidiary Brookfield Reinsurance has made a cash and stock offer for American Equity, the sources said.

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They added that the offer is set to be recommended by the insurer’s board.

The reinsurer already owns nearly 20% of American Equity, which could announce the deal as early as next week.

Last December, American Equity rejected Prosperity Life Group’s unsolicited takeover bid.

Supported by hedge fund Elliott Investment Management, Prosperity Life offered to acquire American Equity in an all-cash deal priced at $45 per share.

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At the time, American Equity’s board dismissed the proposal, stating that it “significantly undervalues” the company and its “value-creation potential”.

According to the sources, Brookfield’s bid is more than Prosperity Life’s rejected offer and values American Equity significantly higher than its most recent stock price.

The company’s shares surged in the last minute of normal trading on Monday, rising 11% to $45.10, giving the business a $3.5bn market value, the publication said.

Representatives for American Equity and Brookfield did not have an immediate comment on the development, the media outlet added.

Massachusetts Mutual Life Insurance and Athene Holding have also made buyout offers for the company, which offers annuities and other insurance services.

Earlier this year, Brookfield Reinsurance signed a $1.1bn deal to acquire underwriting company Argo.