New York: AIG is selling its foreign life insurance unit to MetLife Inc for about $15.5 billion, in a deal that would help the US government recover billions in bailout funds.
MetLife said on Monday that it would pay American International Group Inc $6.8 billion in cash and about $8.7 billion in equity securities for the American Life Insurance Co (Alico) unit, confirming an earlier Reuters report.
The deal for Alico will help MetLife expand globally. MetLife, which is already the largest life insurer in the US and Mexico, will get a boost in Japan, the world’s second-largest life insurance market.
Alico will also strengthen MetLife’s position in Europe and move it into a top five market position in many emerging markets in Central and Eastern Europe, the Middle East and Latin America.
AIG will use the cash from the deal to redeem the Federal Reserve Bank of New York’s $9 billion preferred interest in a special purpose vehicle that holds Alico.
It will also sell the securities over time to repay its debt to the US government after a $182.3 billion taxpayer-funded rescue.