Blue Owl Capital Corporation and II Merger Set to Create a Stronger Investment Entity

Blue Owl Capital Corporation and OBDC II Merger Announcement

On November 5, 2025, a significant shift in the financial landscape was announced as Blue Owl Capital Corporation (NYSE: OBDC) and Blue Owl Capital Corporation II (OBDC II) revealed their merger agreement. This strategic move enhances OBDC's stature, positioning it as the second-largest publicly traded Business Development Company (BDC) based on total assets.

Overview of the Merger

With OBDC set to be the surviving entity in the merger, both companies' boards have already approved the union after careful consideration by their respective special committees. Shareholder approvals will proceed in the coming months, alongside customary regulatory reviews and closing conditions.

Craig W. Packer, CEO of OBDC, expressed confidence in the merger’s potential, stating, "This merger simplifies Blue Owl's BDC structure and builds an even stronger OBDC, facilitating added scale and cost efficiency. By optimizing our resources through the Blue Owl platform, we aim to enhance our portfolio and deliver attractive, risk-adjusted returns for our shareholders."

Key Highlights of the Merger

1. Portfolio Enhancement: As a result of this merger, OBDC's investment portfolio is projected to increase by approximately $1.7 billion, reaching a total of about $18.9 billion. The combined entity will encompass 239 portfolio companies with a strong emphasis on senior secured investments, which are expected to maintain an impressive 80% ratio.
2. Investment Strategy Synergy: Both OBDC and OBDC II operate under similar investment strategies, leading to a substantial overlap of around 98% in investments. This synergistic approach will benefit from a streamlined investment process, enhancing overall operational efficacy.
3. Liquidity and Investor Attraction: Following the merger, enhanced liquidity is anticipated for existing shareholders, which could attract a broader, more diverse base of investors.
4. Operational Savings: The merger is projected to yield approximately $5 million in operational savings within the first year, resulting from reduced redundancies and improved scale, thereby potentially lowering the cost of debt.
5. Increased Investment Income Potential: The combined company stands to gain from eliminating duplicative expenses, which will lead to lower financing costs and the ability to improve asset yields across the portfolio.

Exchange Ratio and Shareholder Impact

Under the proposed merger terms, OBDC II shareholders will receive whole shares of OBDC based on an exchange ratio determined just before closing. No fractional shares will be issued; cash payments for fractions will be made instead.

The exchange ratio will be influenced by the Net Asset Values (NAV) of both OBDC and OBDC II before closing, ensuring that shareholders are equitably compensated based on current market conditions.

Looking Ahead

With a robust timeline in place, the merger is anticipated to finalize in the first quarter of 2026, contingent upon shareholder approvals and compliance with regulatory requirements. The combined entity, continuing to be managed by Blue Owl Credit Advisors, will operate under the ticker ‘OBDC’ on the New York Stock Exchange.

Conference Call Announcement

In light of this major development, OBDC will host a conference call on November 6, 2025, at 10:00 AM Eastern Time to discuss the merger details and their third-quarter financial results. Stakeholders are encouraged to participate in this discussion to gain insights into the future trajectory of the company post-merger.

Conclusion

The merger between Blue Owl Capital Corporation and its subsidiary OBDC II marks a significant milestone in the finance sector, presenting opportunities for enhanced portfolio strength and shareholder returns. As we look forward to the completion of this merger, stakeholders are urged to stay informed and engaged through the upcoming conference calls and shareholder meetings, signaling a new era for Blue Owl in the investment landscape.