In an attempt to payback government bailout loans, American International Group (A.I.G.) has struck a deal with Prudential P.L.C. (British financial services firm) that will leave A.I.G. without its Asian division, American International Assurance (A.I.A). Private talks began late last week and concluded today. The company is also in talks attempting to sell their foreign life insurance unit, American Life Insurance Co.
According to Reuters, A.I.G.’s Asian life insurance group sold for over $35 billion. It is one of A.I.G.’s most successful divisions, with over 20 million policyholders in Asia. A.I.G. has been planning to sell A.I.A. to help repay the more than $180 billion in government bailout money they received, but it could take until the end of the year for the deal to close. Additionally, it is estimated that American Life Insurance Co. could bring in about $15 billion if sold. A.I.G. is also looking to sell about a dozen small assets from International Lease Finance Corp.
“The administration supports the board of directors at A.I.G. in its decision to sell and recognizes this is a major step in the A.I.G. restructuring plan to de-leverage, de-risk, and pay back taxpayers,” Treasury spokesman Andrew Williams said.
This is the largest deal in Prudential’s 162-year history, according to nytimes.com. Prudential is now the biggest player in Asian Life Insurance.
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