American International Group (NYSE: AIG) is apparently not wasting any time raising even more capital following capital last week’s sale of American International Assurance (AIA) to Prudential plc. The firm is expected to announce as early as Monday morning that it has reached a deal to sell its American Life Insurance Co. (Alico) to MetLife for about $15.5 billion, according to recent reports.
Last week AIG sold its AIA unit to Prudential plc, Britain’s largest insurer, for $35.5 billion, its largest deal since receiving a government bailout and putting another step closer to paying back all of taxpayer’s money. The MetLife deal would continue that momentum.
According to the terms that will likely be announced, MetLife would pay AIG about $6.8 billion in cash with the remainder of payment coming in the form of common stock and preferred shares of the company.
When AIG initially receives the stock from MetLife, it will hold an 8 percent stake in the insurer. However, with the preferred convertible stock it is receiving, the stake can get as high as 20 percent.
The deal is expected to close by the end of 2010, with Met Life expected a positive impact to its bottom line in 2011.
Even with AIG’s recent asset sales, the government holds a 79 percent stake in the insurance giant; a stake the company will not be able to buy back on its own, leaving the complete unwinding off government investment in the insurer to still be determined.
