American International Group (NYSE: AIG) announced that it will be selling its foreign life insurance business to MetLife (NYSE: MET) for $15.5 billion after more than two years of negotiation.
The deal will assist MetLife, who is currently the largest life insurer in both the United States and Mexico, to diversify its revenue across new products and new geographic areas.
The news of the sale comes a week after AIG announced that it had reached an agreement to sell its Asian life insurance unit, American International Insurance, to U.K. based Prudential for $35.5 billion, marking the largest deal ever in the insurance sector.
William Toppeta, president of MetLife’s international business commented to the press that “The AIA deal really is an Asia deal. Ours is really a global deal, It is really about the growth opportunities in a lot of parts of the world and not just about Asia.”
MetLife shares rose 4% after the deal was announced, marking a 6 month high. AIG’s shares rose 3.4%.
MetLife first started pursuing AIG’s American Life Insurance Company, which sells life insurance, accident insurance, health insurance and retirement products in more than 55 counties, just months before AIG nearly collapsed in September 2008.
“The first time that we focused most intensively on Alico would have been in 2008, probably the early part of 2008,” Toppeta said. “And then, of course, the events of the summer and fall of 2008 sort of overtook everybody.”
MetLife said that it would pay $6.8 billion in cash and $8.7 billion in equity for Alico.
