Blue Owl Cancels Major Merger Amid Market Volatility and Investor Concerns

Blue Owl Capital Corporation has terminated its planned merger with Blue Owl Capital Corporation II. The decision was announced on November 19, 2025. It marks a significant shift in strategy for the private credit giant.

Market volatility and investor apprehension forced the halt. The merger was intended to create long-term value for shareholders of both business development companies.

Deal Unravels Under Market Pressure

Investor reaction to the proposed merger was swift and negative. According to Bloomberg, news of the deal triggered a selloff in Blue Owl shares. Concerns centered on potential losses and redemption restrictions for private fund investors.

These restrictions would have locked up capital until the merger closed. The deteriorating market conditions in late 2025 made this prospect untenable for many. The company’s leadership acknowledged the pressure.

Independent Strength and Future Plans

Despite the terminated deal, both entities remain financially robust. Blue Owl Capital Corporation II has delivered strong performance since 2017. It boasts a nearly 80% cumulative net return and minimal loss rates.

Blue Owl Capital Corporation will continue its $200 million share repurchase program. Both companies will continue their focus on lending to U.S. middle-market businesses. Their independent operations are well-capitalized and stable.

What’s Next for Investors and the Funds?

The boards have not ruled out future collaboration. They plan to reevaluate strategic alternatives when market conditions improve. This leaves the door open for a potential future merger.

For now, OBDC II will reinstate its quarterly tender program in Q1 2026. This move is designed to provide liquidity and reassure investors. The immediate focus is on demonstrating the continued strength of each standalone fund.

The terminated merger highlights the power of investor sentiment in volatile markets. Long-term strategic goals sometimes must yield to short-term realities. Blue Owl’s pragmatic decision reflects a commitment to shareholder interests above all else.

The cancellation of the Blue Owl merger underscores a critical lesson for the financial sector. Market stability is a prerequisite for complex consolidation. The funds now move forward independently, with their strong fundamentals intact.

Thought you’d like to know

Why was the Blue Owl merger cancelled?

The merger was cancelled due to recent market volatility and significant investor concerns. Shareholders were worried about potential losses and restrictions on redeeming their investments. The company decided halting the deal was the best course of action.

How has OBDC II performed on its own?

OBDC II has performed very well independently. Since its 2017 start, it has delivered a nearly 80% cumulative net return. Its loss rates are minimal and well below industry averages.

What is Blue Owl Capital Corporation’s repurchase program?

Blue Owl Capital Corporation (OBDC) has a $200 million share repurchase program. This program will continue despite the cancelled merger. It is a tool to signal confidence and return value to shareholders.

Will OBDC II investors be able to sell their shares?

Yes. OBDC II plans to reinstate its quarterly tender program in the first quarter of 2026. This program allows investors to sell their shares back to the company, providing liquidity.

Could the Blue Owl merger happen later?

It is possible. The company’s boards stated they will reevaluate alternatives in the future. A merger could be revisited once market conditions become more stable and favorable.

Trusted Sources

Bloomberg, Blue Owl Capital Inc. SEC Filings, Company Press Releases.