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AIG Agrees to More Than $7.3B in Deals With Blackstone

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What You Need to Know

  • Blackstone would get a 9.9% stake in the Life & Retirement business.
  • The deal implies the business has a value of $20.2 billion.
  • A separate affordable housing assets sale would raise $5.1 billion.

American International Group Inc. is stocking up on cash it can use to split off the AIG Life & Retirement business from the rest of the company and invest in the operations it’s keeping.

The New York-based insurer announced Wednesday that it has agreed to several deals with The Blackstone Group Inc.

Completing the deals could help AIG free up more than $7.3 billion in cash.

The Deals

AIG said it has agreed to sell a 9.9% equity stake in the AIG Life & Retirement business to Blackstone for $2.2 billion in cash. That agreement implies that the Life & Retirement business has a total value of $20.2 billion, according to a deal report that AIG filed with the Securities and Exchange Commission.

AIG agreed to let Blackstone manage $50 billion of the assets in the Life & Retirement business’s investment portfolio. The companies expect the amount of Life & Retirement assets in Blackstone’s care to increase to $92.5 billion over the next six years.

AIG hopes to complete the Life & Retirement deals with Blackstone by Sept. 30.

AIG also has agreed to sell a block of U.S. affordable housing assets to Blackstone Real Estate Income Trust Inc. for $5.1 billion by Dec. 31.

The Reasons

AIG announced plans to split off the Life & Retirement business, which is a major issuer of both  life insurance and annuities, in October 2020.

Peter Zaffino said the Life & Health business arrangement “provides AIG with flexibility as we continue to work to separate Life & Retirement from AIG.”

Zaffino said AIG is selling the affordable assets because they are no longer core to AIG’s long-term investment strategy.

(Image: Diego M. Radzinschi/ALM)


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