AIG to Sell ALICO to MetLife for Approximately
Transaction unlocks significant value for AIG to repay the U.S. Government, including $6.8 billion in cash
to Federal Reserve Bank of New York upon closing
March 08, 2010 06:15 AM Eastern Time
NEW YORK--(EON: Enhanced Online News)--American International Group, Inc. (NYSE: AIG) announced
today a definitive agreement for the sale of American Life Insurance Company (ALICO), one of the world’s largest
and most diversified international life insurance companies, to MetLife, Inc. (MetLife) for approximately $15.5
billion, including $6.8 billion in cash and the remainder in equity securities of MetLife, subject to closing adjustments.
The cash portion of the proceeds from this sale will be used to reduce the liquidation preference of the Federal
Reserve Bank of New York (FRBNY) in the special purpose vehicle (SPV) formed by AIG and the FRBNY to
hold the interests in ALICO.
“This sale is an important step toward repaying the government. ALICO is a unique international life insurer, and we
view this as a terrific combination that will further enhance the company’s potential over the long term. With this sale
of ALICO, along with the sale of AIA to Prudential plc announced last week, we are on track to generate
approximately $50.7 billion from these two transactions alone, consisting of approximately $31.5 billion in cash to
repay the FRBNY, plus another approximately $19.2 billion in securities that we will sell over time to repay the
government. In addition, both sales give AIG greater flexibility to move forward with our restructuring and rebuilding
efforts, and focus on enhancing the value of our key insurance businesses,” said Harvey Golub, Chairman of the AIG
Board of Directors.
On December 1, 2009, the FRBNY received preferred interests in the ALICO SPV with a liquidation preference of
$9 billion. Accordingly, upon the closing of this sale of ALICO, the ALICO SPV will receive and pay to the
FRBNY approximately $6.8 billion in