American International Group Inc. says it will step up efforts to spin off its American Life Insurance Company unit as an independent entity.
The announcement comes amid speculation that AIG, New York, maybe trying to sell ALICO to MetLife Inc., New York.
AIG says it will seek an initial public offering and public stock listing for ALICO, which sells life insurance and other products in international markets.
AIG originally announced it was preparing the subsidiary to become independent March 2, in connection with an agreement with the U.S. Department of the Treasury and the Federal Reserve System to improve AIG’s capital position and protect the value of its key businesses.
“We continue to consider all strategic options through a robust, structured and disciplined process,” AIG Chairman Edward Liddy says in a statement. “At this stage, we expect that a public offering for ALICO will be beneficial to all stakeholders, including U.S. taxpayers, policyholders, employees, and distribution partners.”
If MetLife Inc. were to acquire ALICO, that could significantly boost MetLife foreign earnings, according to Suneet Kamath, a securities analyst with Sanford C. Bernstein & Co. L.L.C., New York.
Bernstein was commenting on recent press reports that MetLife might acquire ALICO from AIG.
Kamath pointed to recent comments by top MetLife executives, including C. Robert Henrikson, the company’s chief executive, which express a strong interest in expanding the company’s international business.
Acquiring ALICO could boost MetLife’s international earnings to half of its total income, from about 20% to 25% today, the analyst estimates.