American International Group agreed Sunday to sell great unity of life insurance at MetLife for approximately $ 15.5 billion, sources familiar with the matter told DealBook, in what would be the second major operation in a week to help pay taxpayers who funded bailout.
On Sunday evening, advice A.I.G. and MetLife has approved an agreement for the unit, the American Life Insurance Company, said that these persons. The agreement for the unit, known as Alice, will be announced on Monday morning, sources said.
This follows an agreement A.I.G. last week to sell the units of other major insurance American International Assurance, Prudential PLC of Great Britain 35.5 billion U.S. dollars. Together, the two sales will increase by about 51 million.
Under the terms of Alico, MetLife pays approximately $ 6.8 million in cash and the rest consists of common and preferred shares, including mandatory convertible preferred shares. The first results of $ 9 million from the sale will go to the selection of the cancellation of shares of Alico, organized by the Federal Reserve Bank of New York and the rest will be used to reduce loan commitments of AIG New York Fed (which means that U.S. $ 2.2 million of securities will be sitting in the car created specifically to organize the New York Fed, shares of Alico until its sale, said that these people).
With the sale, A.I.G. Metlife will initially be about 8 per cent, although in principle, the absence of independent voters, according to sources. Let AIG stock options will be converted into common shares for several years, the population could rise to over 20 per cent.
This agreement should be concluded at the end of 2010, according to sources. MetLife believes that the transaction will significantly increase earnings per share in 2011, to 45 cents to 55 cents per share, excluding all at once.
MetLife and A.I.G. had discussions about a potential deal for most of Alico for the past year, people informed on the subject told DealBook. If the contours of the offer has been fixed weeks, negotiations have been delayed because of questions about tax issues that must be clarified by the IRS.
A question now is how AIG pay the rest of the rescue plan, including a share of 79.9 percent still held by the government. One possibility being considered is the option to change the actions of the government to sell shares from time to time, either by direct conversion or through reimbursement by issuing new shares, a person briefed on the question says DealBook.
“Economically, the government’s interest is replaced by private capital,” said this person.
It reminds people that no plan in place, even if AIG does not have big plans for the sale other than the withdrawal of the company leasing aircraft.
Metlife advised by Credit Suisse, Barclays Capital, HSBC, Bank of America, Merrill Lynch and Deutsche Bank, while AIG is suggested by The Blackstone Group, Citigroup and Goldman Sachs. New York Fed suggested by Morgan Stanley.