American International Group Inc, which is trying to pay back the government after being propped up by a $182.3 billion aid package, is in talks to sell its American Life Insurance Co (Alico) unit to MetLife Inc for between $14 billion and $15 billion. The Federal Reserve Bank of New York would get $9 billion of the proceeds because of its preferred interest in the business, leaving AIG with several billion dollars that it could use to pay some of what it owes the government.
Selling Alico would also signal a pickup in the market for insurance sector deals, which bodes well for other AIG asset divestitures, like the planned initial public offering for American International Assurance (AIA), analysts said. AIA, its Asian life insurance unit, might go public in the first half of 2010 in Hong Kong. That offering could fetch more than $10 billion. The Fed has a preferred interest worth $16 billion in a special vehicle that holds AIA. But AIG, as of December 1, still owed US taxpayers $17.2 billion under a Fed credit facility and $44.8 billion in equity injections from the US treasury that it must pay back. The US government also owns nearly 80% of AIG.