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.

AIG announced March 1 that had agreed to sell AIA Group Ltd., an international life unit, to Prudential P.L.C., London, for about $35 billion.

“Both sales give AIG greater flexibility to move forward with our restructuring and rebuilding efforts and focus on enhancing the value of our key insurance businesses,” AIG Chairman Harvey Golub says.

AIG says it will use the proceeds from the deals to pay the U.S. government back for part of the bailout financing it received. If all goes as planned, AIG will generate a total of about $51 billion in deal volume, including $31.5 billion in cash and $19.2 billion in securities.

AIG would pay about $31.5 billion to the Federal Reserve Bank of New York, cutting what it owes to the New York Fed to about $45 billion.

The money paid to the New York Fed would include $6.8 billion in cash proceeds that AIG expects to get from MetLife when the deal closes, AIG says.

The special purpose vehicle formed by AIG and the New York Fed to hold AIG’s interests in ALICO would hold more than 78 million shares of MetLife common stock, about 6.9 million shares of MetLife preferred stock that could be converted into about 68 million shares of common stock, and 40 million equity units of MetLife with a liquidation preference of $3 billion, according to AIG and MetLife.

The ALICO special purpose vehicle intends to turn the MetLife securities into cash over time, after the end of the minimum holding period, according to AIG. The ALICO SPV would then pay the remainder of the resulting proceeds to the New York Fed..

The was a “result of a long and diligent study” and “an opportunity to acquire an international insurer that is very complementary to our company,” Henrikson said during the conference call.

The acquisition should improve MetLife’s growth in earnings and return on equity “both immediately and over the long term,” he said. “It significantly accelerates our global growth.”