MetLife Inc. (NYSE:MET) is moving ahead with long-rumored plans to acquire American Life Insurance Company from American International Group Inc. (NYSE:AIG), for a price of about $15.5 billion.
Founded in 1921, ALICO sells accident and health insurance, life insurance and fixed annuities to about 20 million clients in 55 countries.
ALICO has 12,500 employees and 60,000 agents, brokers, banks and other intermediaries in its distribution networks.
Completing the acquisition would give MetLife, New York, a significant presence in Japan, prominence in Europe and South America, and number-one positions in the life markets in Russia and Chile, in terms of premiums written, MetLife executives report.
The boards of both MetLife and AIG, New York, have approved the transaction, and the companies hope to close by the end of the year.
The deal should result in few layoffs, because ALICO has little overlap with MetLife’s operations, MetLife executives report.
AIG would get a significant equity stake in MetLife, New York, but, in a conference call with analysts, MetLife Chairman C. Robert Henrikson said published reports suggesting that AIG could end up with a 20% stake in MetLife tell only part of the story.
At the deal’s close, AIG would own 8% of MetLife, and it would have the potential to buy an additional 14% after getting through a 3-year waiting period before it could convert preferred shares.
AIG does not want “to comment on other people’s math,” an AIG spokesman says.
The MetLife-ALICO deal is the second proposed sale of a key subsidiary of AIG that AIG has announced in little more than a week.