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Monday, November 23, 
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AIG makes its biggest deal yet

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Published October 13, 2009 at 10:52 AM
AIG_sign125x100.jpgIn its biggest deal to date, American International Group Inc. (NYSE:AIG) sold its Taiwan life insurance unit Nan Shan to Primus Financial Holdings Ltd. and China Strategic Holdings Ltd. for $2.15 billion.

China Strategic will take an 80% stake in the group, and Primus Financial will own the remainder. A team from Simpson Thacher is representing the consortium. (The Deal Pipeline subscribers can read the full story here.)

In order to pay off its bailout, AIG has sold $12 billion in assets so far (see list). The Nan Shan deal tops the $2 billion auto insurance sale to Zurich Financial Services, and it could mean there are more big deals on the way for AIG. Other businesses the insurer is selling include:

  • AIG may sell a small part of its portfolio of commercial aircraft to a group led by the chief executive of its aircraft leasing business, Steven Udvar-Hazy. The consortium apparently includes private equity firms Onex Corp. and Greenbriar Equity Group, according to Reuters. The sale of International Lease Finance Corp. was put on hold shortly after CEO Robert Benmosche took over because the unit has $32 billion in debt financing and subordinated debt that is weighing down its valuation and the number of bidders willing to take it on.
  • The AIG Global Real Estate fund management business has around $12.4 billion in assets and $5.2 billion in equity capital. The unit could be sold for about $9 billion. Interested bidders may include BlackRock Inc. (NYSE:BLK) and Blackstone Group LP (NYSE:BX) (which might be a conflict because Blackstone is advising). Sources told Pensions & Investments that if it sells the unit Win J. Neuger will continue as CEO.
  • Ski resort Stowe Mountain Resort is also up for sale, according to The Boston Globe. The resort could bring in $100 million for AIG, according to The Street.

For the latest on all of AIG's auctions, check out The Deal Pipeline (subscription required).

AIG, is preparing to take both its American International Assurance Co. Ltd., or AIA, and its life insurance unit, American Life Insurance Co., or Alico, public if it can't sell them. The public offerings could rake in $25 billion. "The bailout includes a $60 billion Federal Reserve credit line, a Treasury investment of almost $70 billion, and as much as $52.5 billion to buy mortgage-linked assets owned or backed by the insurer," according to Bloomberg. If the insurer takes the two companies public, then it will have $37 billion to pay off most of the $38.8 billion FRBNY Facility loan. That, of course, only covers part of the loans it has to pay back, but it's something. - Maria Woehr

Follow me on Twitter @newsgirlmw


Also see:
AIG dismisses McKinsey, shutters Project Destiny
Is it really time to junk AIG?

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