Blue Owl Advances Market Consolidation Strategy Through OBDC-OBDC II Combination

On November 5, 2025, Blue Owl Capital Corporation (NYSE: OBDC) and Blue Owl Capital Corporation II (OBDC II) formally announced a definitive merger agreement that will unite two complementary specialty finance platforms focused on U.S. middle-market lending. Under the deal structure, OBDC will serve as the acquiring entity, subject to OBDC II shareholder approval and customary regulatory clearances.

Strategic Rationale and Combined Entity Positioning

The combination represents a strategic move to streamline Blue Owl’s business development company (BDC) infrastructure while establishing enhanced competitive positioning in the publicly traded BDC marketplace. Following the merger close, the consolidated OBDC is projected to rank as the second-largest publicly traded BDC by total assets, a significant endorsement of the platform’s scale advantages.

The merged entity will manage an investment portfolio valued at approximately $18.9 billion across 239 portfolio companies, compared to OBDC’s current standalone position of $17.1 billion spanning 238 companies. This $1.7 billion portfolio accretion materializes through the integration of OBDC II’s $1.7 billion asset base managed across 190 holdings as of September 30, 2025.

Portfolio Quality and Investment Overlap

A critical feature supporting the transaction’s investment thesis is the substantial operational alignment between both entities. Blue Owl Credit Advisors LLC, serving as the investment adviser to both platforms, has maintained synchronized investment allocations since OBDC II’s inception, resulting in approximately 98% portfolio overlap between the two vehicles.

The combined portfolio preserves OBDC’s hallmark credit characteristics, with 80% of pro forma investments maintaining senior secured positioning and only 1.3% of fair value investments on non-accrual basis, reflecting disciplined underwriting standards across the combined platform.

Financial Impact and Cost Synergy Realization

Management projects $5 million in annual operational cost savings materializing in the first year following transaction close, driven by elimination of duplicate administrative infrastructure and shared platform economies. Beyond immediate expense reduction, the expanded scale positions the combined entity to negotiate improved financing terms and lower cost-of-debt arrangements over time.

The elimination of duplicative expenses, combined with improved debt financing economics and expanded asset yield opportunities, is expected to contribute to net investment income accretion benefiting shareholders. The transaction also expands deployment capacity for incremental investment opportunities, potentially enhancing portfolio returns.

Exchange Mechanics and Shareholder Considerations

OBDC II shareholders will receive newly issued OBDC shares on a formula-based exchange ratio determined prior to closing. The exchange ratio calculation incorporates both entities’ net asset value per share alongside OBDC’s market trading price, with specific treatment dependent on whether OBDC trades at a premium or discount to NAV:

• When OBDC trades at or below NAV (≤100%): Exchange ratio equals OBDC II NAV divided by OBDC NAV
• When OBDC trades at a premium (>100%): Exchange ratio equals OBDC II NAV divided by OBDC market price

Fractional share positions will be settled via direct cash payment to affected shareholders rather than issuance of fractional shares.

Transaction Support and Timeline

The transaction benefits from significant adviser support, with Blue Owl Credit Advisors LLC reimbursing 50% of merger-related fees and expenses up to a $3 million cap contingent upon consummation. Both entities anticipate uninterrupted dividend distributions throughout the announcement-to-close period, while OBDC II has committed to forgoing additional tender offer activity pending merger completion.

Concurrent with the merger announcement, OBDC’s board approved a new $200 million share repurchase authorization, effective for 18 months or until fully deployed, providing management flexibility for capital allocation between now and the transaction’s anticipated Q1 2026 close date. This new program supplements the existing $150 million repurchase authorization expiring November 7, 2025.

Governance and Operational Continuity

The combined company will maintain OBDC’s current governance structure and officer roster under continued external management by Blue Owl Credit Advisors LLC. Trading will continue under the “OBDC” ticker symbol on the New York Stock Exchange, ensuring continuity for existing market participants.

Both special committees and full boards of directors have unanimously endorsed the transaction, reflecting confidence in the strategic and financial rationale from fiduciary-level review.

Market Implications and Investor Conference

The merger announcement will be discussed during OBDC’s third-quarter 2025 earnings conference call on November 6, 2025 at 10:00 AM Eastern Time, with webcast access available through the company website. Market participants may also access the call via domestic dial-in (877) 737-7048 or international line +1 (201) 689-8523.

The transaction exemplifies ongoing consolidation trends within the publicly traded BDC ecosystem, where scale economics and operational efficiency increasingly influence competitive positioning. For Blue Owl and its stakeholders, the combination delivers meaningful synergies while reinforcing market leadership within the specialty lending landscape.