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New York - American International Group will sell its overseas life and health insurance unit for $15.5bn to MetLife, the insurer said on Monday, as it attempts to repay billions in government aid.
In the deal announced on Monday, MetLife will pay $6.8bn in cash, and the rest in stock and equity units.
The cash portion of the sale will be used to reduce a $47.9bn investment in AIG by Federal Reserve Bank of New York.
"With this sale of Alico, along with the sale of AIA to Prudential announced last week, we are on track to generate approximately $50.7bn from these two transactions alone, consisting of approximately $31.5bn in cash to repay the FRBNY, plus another approximately $19.2bn in securities that we will sell over time to repay the government," said AIG chairperson Harvey Golub. "Both sales give AIG greater flexibility to move forward with our restructuring and rebuilding efforts."
AIG owes the government almost $130bn in bailout funds, including $47.3bn owed to the US Treasury and $34.5bn in assistance tied to the value of investments the New York Fed bought to prop up AIG.
The deal will give MetLife a larger presence in Japan as well as high-growth markets in Europe, the Middle East and Latin America.
Alico, which operates in more than 50 countries, is the second international unit AIG has sold this month. On March 1, AIG said it would sell a cornerstone of its business, Asia-based life insurer AIA Group, to Britain's Prudential in a government-approved $35.5bn deal.
AIG and MetLife are based in New York.
AIG shares rose 10c to $28.18 in premarket trading.
- AP
