AIG closes MetLife deal

US-based American International Group (AIG) has closed the deal to sell its foreign unit American Life Insurance Company (Alico) to MetLife for US$16.2 billion in cash and shares. Together with the $20.5 billion already raised from its recent initial public offering (IPO) of its Asian life insurance business AIA, AIG has managed to garner $36.7 billion to repay the American government. According to information released by the companies, the MetLife deal involves around $7.2 billion in cash and the remainder in MetLife securities, which ‘will be sold over time, subject to certain lock-up provisions and market conditions, to provide additional funds to repay the government’.
A week earlier, the gross proceeds from the IPO of AIA reached $17.8 billion, and the exercise of the over-allotment option increased these proceeds to $20.5 billion. AIG has said it will use the cash proceeds from both transactions to repay the credit facility extended to it by the Federal Reserve Bank of New York in 2008. Robert Benmosche, president and chief executive officer of AIG, said: “We promised the American taxpayers we would repay them, and the IPO of AIA last week and the completion of the Alico transaction move us closer to delivering on our promise. As we said on 30 September, AIG will restructure itself around its core property casualty and life and retirement services businesses, which are performing well, and will provide our company with a strong foundation to build value for all stakeholders going forward.”