AIG confirms ALICO sale

9 March 2010

American International Group (AIG) has announced the details of the sale of ALICO, its foreign insurance unit, to fellow US insurer MetLife.

News of a potential deal was leaked late last week after company insiders told Reuters an agreement on the sale was close.

It has now been confirmed that AIG will receive $15.5 billion for the overseas division, with $6.8 billion being paid in cash and $8.7 billion coming in the form of shares and stock options in MetLife.

It means that AIG will take a 20 per cent stake in MetLife – giving US taxpayers a share in the company.

The government currently owns 80 per cent of AIG after handing the firm more than $180 billion in bailout funding.

AIG has also recently sold AIA, its Asian life insurance business, to Prudential for $25 billion as it seeks to repay the state.

Harvey Golub, chairman of AIG, said: "Both sales give AIG greater flexibility to move forward with our restructuring and rebuilding efforts."

By Gary Cooper

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