8-KMaterial AgreementsExhibits & Filings

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Material Agreement (Mar 11, 2010)

Filed March 11, 2010For Securities:AIG

Summary

American International Group, Inc. (AIG) has entered into a definitive agreement to sell its subsidiary, American Life Insurance Company (ALICO), to MetLife, Inc. for approximately $15.5 billion. The transaction comprises $6.8 billion in cash and the remainder in MetLife equity securities. The cash proceeds will be used to reduce AIG's outstanding obligations to the Federal Reserve Bank of New York (FRBNY), specifically by paying down the liquidation preference of preferred interests held by FRBNY in a special purpose vehicle that holds ALICO's equity. This sale represents a significant step in AIG's ongoing restructuring and deleveraging efforts, aimed at fulfilling its commitments to government entities and strengthening its financial position.

Key Highlights

  • 1AIG to sell American Life Insurance Company (ALICO) to MetLife, Inc. for approximately $15.5 billion.
  • 2Transaction includes $6.8 billion in cash and MetLife equity securities (common stock, convertible preferred stock, and equity units).
  • 3Cash proceeds will be used to reduce AIG's obligation to the Federal Reserve Bank of New York (FRBNY).
  • 4The sale is subject to customary closing conditions, including regulatory and antitrust approvals.
  • 5AIG will receive significant equity in MetLife, which it intends to monetize over time to further repay debt.
  • 6The Seller (ALICO Holdings LLC) has indemnification obligations to MetLife, with AIG backstopping these obligations.
  • 7The transaction completion deadline is January 10, 2011, with potential extensions under certain conditions.

Frequently Asked Questions

The total value of the sale of ALICO to MetLife, Inc. is approximately $15.5 billion. This amount is comprised of $6.8 billion in cash and the remainder in various forms of MetLife equity securities.

The $6.8 billion in cash proceeds will be paid to the Federal Reserve Bank of New York (FRBNY) to reduce the liquidation preference of preferred interests held by the FRBNY in ALICO Holdings LLC, a special purpose vehicle.

The consummation of the sale is subject to several conditions, including obtaining necessary regulatory and antitrust approvals, ALICO maintaining a minimum total adjusted capital to risk-based capital ratio of at least 400 percent at closing, and other customary closing conditions.

AIG has agreed to provide cash or other liquid assets to the Seller (ALICO Holdings LLC) to meet its indemnification obligations to MetLife under the Stock Purchase Agreement, should the Seller's assets be insufficient.