AIG, MetLife confirm Alico deal

New York: AIG, MetLife confirm Alico deal. A deal has been sealed between two major life insurance players in the United States.

Reports have surfaced that American International Group Inc. and MetLife Inc. have decided to a $15.5 billion deal. If it materializes and its chances are high then it will be AIG's second-largest foreign life-insurance business. Business analysts are touting the deal as a complicated one. But this would give a lot of power to US government-controlled AIG. From now onwards it will have a say in roughly a fifth of MetLife that is America’s No. 1 seller of life insurance.

Senior executives at these two companies have revealed that AIG has agreed to sell American Life Insurance Co.. The latter company is known in the market as Alico. Insiders say that it has been sold for $6.8 billion in cash and $8.7 billion in MetLife equity. This included common stock and convertible preferred securities.

The new deal allows the AIG a stake of about 20% in Metlife. Besides, it will receive 78.2 million common shares and 6.6 million shares of convertible preferred stock. All these exchanges will boost AIG in the market. Currently, the company’s nearly 80% share is owned by the US government. This is in itself is a huge share.