AIG Agrees to More Than $7.3B in Deals With Blackstone
AIG says the cash will help support efforts to separate from the Life & Retirement business.
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)