MetLife Inc. (NYSE:MET) says in its earnings release for the fourth quarter of 2009 that it may acquire a unit of American International Group Inc. (NYSE:AIG)
MetLife, New York, is talking to AIG, New York about acquiring AIG's American Life Insurance Company international life insurance subsidiary, MetLife says.
"No agreement has been reached, and there are no assurances that an agreement will be reached," MetLife says.
"Because MetLife is financially strong and has a deep management team, we are in a very good position to pursue acquisitions that are strategic and would accelerate our long-term growth," MetLife Chairman C. Robert Henrikson says in a statement accompanying the disclosure of the ALICO talks. "If we reach an agreement, it will be because the transaction meets our criteria for acquisitions, including having the potential to generate long-term value for both shareholders and customers."
MetLife is reporting $289 million in net income for the latest quarter on $12 billion in revenue, compared with $954 million in net income on $14 billion in revenue for the fourth quarter of 2008, when MetLife benefited from $2.5 billion in net investment gains.
Operating income, which includes a variety of unusual gains and charges, increased to $793 million, from $132 million.
Fixed annuity sales fell to $499 million, from $4.1 billion, but variable annuity sales increased to $3.7 billion, from $3.4 billion.
Total individual life sales increased to $144 million, from $123 million.
Although net income was down, securities analysts are giving MetLife's latest results good reviews.
Andrew Kligerman, an analyst at UBS Investment Research, New York, notes that gross unrealized bond losses were down 8%, and he and other analysts were impressed by MetLife's sales totals.
"New business [growth] strong across many fronts," writes Suneet Kamath of Sanford C. Bernsten & Company L.L.C., New York.
"This was a strong top-line quarter for MET," writes John Nadel of Sterne, Agee & Leach Inc., New York. "Investment losses (ex. derivative moves) were well within rating agency tolerances and management took advantage of strength in certain areas to reduce the long-term equity market assumption on its fee-based products from 8.25% to 8.00%, injecting a bit more conservatism into [deferred acquisition cost] assumptions looking forward."
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For earlier coverage of the possibility of a MetLife-ALICO deal, please see MetLife Said To Be Bargaining For AIG Unit.
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