Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Gaza: A Truce At All Costs?

Read more

AFRICA NEWS

Central African Republic: Brazzaville ceasefire talks deliver fragile deal

Read more

FOCUS

Sluggish tourist season in Crimea

Read more

ENCORE!

Bartabas : Mixing Christ with Spanish music and dancing horses

Read more

IN THE PAPERS

Shifts in the propaganda war waged between Israelis and Palestinians

Read more

IN THE PAPERS

French MPs face quandary in pro-Palestinian rallies

Read more

THE INTERVIEW

Yezid Sayigh, Senior Associate at the Carnegie Middle East Center in Beirut

Read more

#TECH 24

Mind the Gender Gap : getting more women into the tech sector

Read more

INSIDE THE AMERICAS

Bolivian children: heading to work aged 10

Read more

  • France sending military unit to located Algerian plane crash site

    Read more

  • France says missing Algerian plane 'probably crashed'

    Read more

  • Deadly strike on UN shelter in Gaza Strip

    Read more

  • Pope meets with Sudanese Christian woman sentenced to death for apostasy

    Read more

  • Algerian jet vanishes: 'We should eliminate the missile hypothesis'

    Read more

  • Italy’s Nibali cruises to easy victory in 18th stage of Tour de France

    Read more

  • Iraqi parliament elects moderate Kurd as president

    Read more

  • US, European aviation agencies lift travel restrictions to Tel Aviv

    Read more

  • No end to fighting until Israel ends Gaza blockade, Hamas says

    Read more

  • Two foreign women shot dead in western Afghanistan

    Read more

  • At least 60 killed in attack on prison convoy near Baghdad

    Read more

  • Cycling is ‘winning the war on doping,’ says expert

    Read more

  • Ceasefire agreed for Central African Republic

    Read more

  • Can Jew-kissing-Arab selfie give peace a viral chance?

    Read more

  • Botched Arizona execution takes nearly two hours

    Read more

Business

AIG sells overseas unit to insurance giant MetLife

Text by News Wires

Latest update : 2010-03-08

In a deal that will help AIG raise funds to pay back part of its government bailout, US insurance giant MetLife will take over American Life Insurance Company (ALICO), an overseas unit of AIG, in a deal worth 15.5 billion dollars.

AFP - US life insurance giant MetLife will acquire a unit of American International Group in a 15.5-billion-dollar deal that will help AIG pay back part of its government bailout, the firms said Monday.

MetLife will take over American Life Insurance Company (ALICO) in a deal that will comprise 6.8 billion dollars in cash plus some 8.7 billion dollars in MetLife stock, they said in separate statements.

The stock portion of the purchase will consist of 78.2 million shares of MetLife common stock valued at three billion dollars, and the rest in convertible preferred stock and equity units.

The deal would leave AIG owning about 20 percent of MetLife, according to The Wall Street Journal.

AIG said the cash portion of the proceeds from the sale will be used to reimburse the Federal Reserve Bank of New York (FRBNY), which helped bail out the company during the global financial crisis.

"This sale is an important step toward repaying the government," said Harvey Golub, chairman of the AIG board of directors.

He said that with the sales of ALICO and the Asian unit AIA to Prudential, which was announced last week, the company was on track to generate approximately 50.7 billion dollars from these two transactions alone.

Approximately 31.5 billion in cash will be used to repay the FRBNY, while another approximately 19.2 billion dollars in securities will be sold over time to pay back the federal government.

AIG neared collapse in September 2008, unable to meet its obligations for contracts written to insure mortgage securities and related assets without sufficient capital.

The Federal Reserve, fearing a shock to the global financial system in the event of an AIG default, provided a loan of 85 billion dollars to AIG in September 2008 in what would be the first portion of a staggering bailout worth some 180 billion dollars, some of which came from the Troubled Asset Relief Program (TARP).

For its part, MetLife said the transaction would increase its 2011 operating earnings per share by approximately 0.45 to 0.55 dollars per share.

"With this acquisition, MetLife is delivering on its strategy to accelerate international expansion as a powerful growth engine for the company," MetLife chief executive Robert Henrikson said in a statement.

"Today's transaction will bring together two profitable, complementary, well-established businesses with superb track records and strong long-term growth potential," he added.

"We expect it will increase MetLife's return on equity and be accretive to operating earnings."

Founded in 1921, ALICO has 12,500 employees in more than 50 countries and 20 million customers worldwide.

MetLife said the transaction also includes ALICO's global benefits network serving US and foreign multinational corporations.

The transaction has been approved by the boards of directors of both MetLife and AIG, and is expected to close by the end of 2010.

Date created : 2010-03-08

  • INSURANCE

    AIG sells Asian arm to UK's Prudential for $35 billion

    Read more

  • FINANCE

    Outrage as bailed-out AIG pays 100 million dollars in bonuses

    Read more

  • USA

    AIG to sell Taiwan life insurer for 2.2 billion dollars

    Read more

COMMENT(S)