Looking to pay down its debt, New York-based American International Group Inc. (AIG) continues to divest business units. Today, AIG announced that it had reached definitive agreement with New York-based MetLife Inc. for the sale of its American Life Insurance Company (ALICO) unit.
The sale of ALICO comes just one week after AIG announced a $35.5 billion deal to sell its AIA Group Limited (AIA) unit to London-based Prudential plc. If both deals close as scheduled, AIG will repay as much as $32 billion in cash to the Federal Reserve Bank of New York in the coming months.
“With this sale of ALICO, along with the sale of AIA to Prudential plc announced last week, we are on track to generate approximately $50.7 billion from these two transactions alone, consisting of approximately $31.5 billion in cash to repay the FRBNY, plus another approximately $19.2 billion in securities that we will sell over time to repay the government,” Chairman of the AIG Board of Directors Harvey Golub said in a statement. “In addition, both sales give AIG greater flexibility to move forward with our restructuring and rebuilding efforts, and focus on enhancing the value of our key insurance businesses."
The acquisition of ALICO, one of the world’s largest and most diversified international life insurance companies, with help MetLife grow overseas, especially in Japan, which is the world’s second-largest life insurance market. The transaction also strengthens the position in Europe, the Middle East and Latin America.
“With this acquisition, MetLife is delivering on its strategy to accelerate international expansion as a powerful growth engine for the company,” said C. Robert Henrikson, chairman, president and chief executive officer of MetLife, Inc. “This transaction creates a global leader in life insurance and employee benefits by adding significant scale and geographic reach to MetLife’s international footprint and further diversifying the company’s product mix, distribution channels and geographic exposures. We expect it will increase MetLife’s return on equity and be accretive to operating earnings.”
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