Ares Capital Corporation (NasdaqGS:ARCC), a fund managed by Ares Capital Management LLC entered into a definitive merger agreement to acquire American Capital, Ltd. (NasdaqGS:ACAS) for $3.2 billion in cash and stock on May 23, 2016. Under the terms of agreement, cash payment for the outstanding shares will comprise of the sum of cash consideration of $6.41 per share to be paid by Ares Capital and a cash consideration of $1.2 per share by Ares Capital Management, the issue by Ares Capital Corporation of 0.483 shares for each share of American Capital. Ares Capital Corporation will also acquire options and the Incentive Awards of American Capital. In a related transaction, American Capital Agency Corp. (NasdaqGS:AGNC) entered into an agreement to acquire American Capital Mortgage Management, LLC from American Capital, Ltd. for approximately $560 million. Debt commitment letters have been received from Bank of America, N.A. and Wells Fargo Bank, National Association wherein BAML has increased its revolving funding facility from $540 million to $1 billion and Wells Fargo will provide $460 million in new commitments. After the completion of the mergers, American Capital will be a wholly owned subsidiary of Ares Capital. In the event for termination of the agreement by either parties, a termination fee of $140 million will be payable by the defaulting party. American Capital entered into an agreement with the Elliott Parties, which beneficially own approximately 5.8% of the outstanding common stock of American Capital and have additional economic exposure to approximately 10% of American Capital. American Capital and the Elliott Parties agreed that the agreement will supersede and replace the letter agreement, in its entirety. After the completion of the mergers, based on the number of shares of Ares Capital common stock issued and outstanding on the date hereof, Ares Capital stockholders and American Capital stockholders are expected to own approximately 74% and 26% of the combined company's outstanding common stock. Upon the completion of the Transactions, American Capital common stock will be delisted from NASDAQ. After the completion, Ares Capital Management will externally manage the combined company. The transaction has been unanimously approved by Boards of Directors of Ares Capital and American Capital. The transaction is subject to American Capital shareholder approval, approval by Ares Capital shareholders for the issuance of the consideration shares, approval for listing on the NASDAQ Stock Market of the consideration shares, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of certain governmental approvals, receipt of certain third party consents, including approval of Financial Conduct Authority in the United Kingdom and the Guernsey Financial Services Commission and consents from investment funds, consummation of the mortgage Manager sale and other customary closing conditions. As of July 6, 2016, the deal received early termination notice from FTC. As on October 18, 2016, the Board of Directors of American Capital recommends the shareholders to approve the merger. Ares Capital and American Capital have scheduled their shareholders meeting on December 15, 2016 for approval of the merger. The transaction has been approved by American Capital shareholders. The Federal Antimonopoly Service of Russia granted clearance in connection with the Transactions on September 9, 2016. The transaction is expected to close within the next 12 months. As on October 18, 2016, the transaction is expected to be completed in the first week of January 2017. The transaction is expected to be accretive to core earnings per share and net asset value per share between the first and second full years after closing and expect accretion to be north of approximately 10% in the first full year post closing. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC acted as the financial advisors for Ares Capital. Jim Gorton, Adel Aslani-Far, Paul Kukish, Paul D. Tosetti, Javier F Stark, Edward J Boehme, Matthew Villar and James J. McCrory of Latham & Watkins LLP, Willkie Farr & Gallagher LLP, Sutherland Asbill & Brennan LLP and Michael Woronoff and Jonathan Benloulou of Proskauer Rose LLP acted as the legal advisors for Ares Capital. The Goldman Sachs Group, Inc. (NYSE:GS) and Credit Suisse Securities (USA) LLC acted as the financial advisors for American Capital. David J. Goldschmidt, Michael Dorum, John Furfaro, Bruce Goldner, Richard J. Grossman, Shilpi Gupta, Kevin Hardy, Michael Hoffman, David Levy, Robert Saunders and Joseph Yaffe of Skadden, Arps, Slate, Meagher & Flom LLP acted as the legal advisors for American Capital. Bill Mendel of Mendel Communications acted as the public relations advisor for American Capital. Steve Wolosky of Olshan Frome Wolosky LLP acted as the legal advisor for Elliott. Keith Hallam of Cravath, Swaine & Moore acted as legal advisor for Goldman, Sachs and Credit Suisse. Georgeson acted as proxy solicitor for American Capital and it was paid a fee of $0.015 million. D.F. King & Co., Inc. acted as proxy solicitor for Ares capital and it was paid a fee of $0.015 million. American Capital paid to Goldman Sachs $3 million prior to the announcement of the transactions, agreed to pay an additional transaction fee of $13.7 million on completion and will pay a discretionary fee of $2 million upon the completion of the merger. American Capital paid to Credit Suisse $3 million prior to the announcement of the transactions, agreed to pay a transaction fee of $13.7 million upon the completion of the merger and in addition will pay a discretionary fee of $2 million upon the completion of the merger. Ares Capital will pay $13 million to Wells Fargo, $1 million of which was payable upon delivery of its opinion and the principal portion of which is contingent upon consummation of the mergers. Ares Capital has agreed to pay BofA Merrill Lynch a fee of $5.7 million. $1 million of this fee was payable in connection with BofA Merrill Lynch's opinion and the remaining portion of which is contingent upon consummation of the mergers. Abbott (Tad) Lipsky, Jr of Latham & Watkins LLP acted as legal advisor to Ares Capital Corporation. Ares Capital Corporation (NasdaqGS:ARCC), a fund managed by Ares Capital Management LLC completed the acquisition of American Capital, Ltd. (NasdaqGS:ACAS) on January 3, 2017.