American International Group Inc. will add its U.S. life and financial services businesses to the rest of the assets it's putting up for sale so it can pay back its $85 billion loan from the U.S. Federal Reserve. Originally, newly appointed CEO Edward Liddy hoped to retain AIG's life insurance business; however, the insurer will restructure to primarily be focused on property and casualty.
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During a conference call Friday, Liddy stated, "
Potential units to
divest include our U.S. life and financial services businesses. We are going to
entertain bids for the businesses."
Liddy continued, saying that AIG hopes to sell the businesses as one unit. "We have a
preference toward larger transations. ... Larger is better," he said.
The life insurance and retirement business is the
most valuable part of the business, according to The Deal's
Michael Rudnick, and could pay off almost half of the Federal Reserve's
loan. AIG's domestic life operations could generate at least $41
billion from a sale, a source told The Deal.
Liddy also announced that some of AIG's foreign life
insurance businesses including Alico are for sale. The foreign life
insurance businesses could sell for $50 billion, Gary Ransom, an
analyst with Fox-Pitt Kelton, told
The Associated Press.
Bidders for the life businesses may include Allianz SE, Sun Life
Financial Inc., Munich Re, AXA Group, Manulife Financial Group and
Prudential Financial Inc. Other potential bidders for the unit that
sells coverage to individuals through independent agents, according to
Bloomberg, include Chubb Corp., Ace Ltd. and Allianz's Fireman's Fund
Insurance unit.
- Maria Woehr
