8-KMaterial AgreementsSecurities & ListingCorporate Changes+1

METLIFE INC 8-K Report, Material Agreement (Nov 2, 2010)

Filed November 2, 2010For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. (MET) filed an 8-K report on November 1, 2010, detailing the closing of its acquisition of certain businesses from American International Group, Inc. (AIG) and its subsidiary ALICO Holdings LLC. This transaction, originally agreed upon in March 2010, involved significant amendments to the stock purchase agreement. The primary focus of this filing is the completion of the acquisition, which was finalized on November 1, 2010, with the consideration paid in a combination of cash and securities, including a substantial portion in MetLife's equity units.

Key Highlights

  • 1Closing of the acquisition of certain businesses from AIG/ALICO Holdings LLC on November 1, 2010.
  • 2Amendments were made to the original Stock Purchase Agreement, specifically concerning the structure of equity units and AIG's guarantee obligations.
  • 3The equity units component of the deal was restructured; instead of preferred stock being exchanged for debt securities, the equity units now directly consist of forward purchase contracts and an interest in debt securities issued by MetLife.
  • 4AIG's 'Keep-Well' obligation was replaced with an unconditional guarantee of ALICO Holdings LLC's obligations to MetLife.
  • 5MetLife issued 78,239,712 shares of common stock, 6,857,000 shares of Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock, and $3.0 billion in aggregate stated amount of equity units as part of the transaction consideration.
  • 6The Series B Preferred Stock is convertible into approximately 68.6 million shares of common stock, subject to stockholder approval.
  • 7The issuance of these securities was conducted under an exemption from registration pursuant to Section 4(2) of the Securities Act of 1933.

Frequently Asked Questions

The main purpose of this 8-K filing is to report the closing of MetLife's acquisition of certain businesses from AIG and ALICO Holdings LLC, which occurred on November 1, 2010, and to detail the material amendments made to the original stock purchase agreement that facilitated this closing.

The equity units were modified. Originally, they involved an exchange of preferred stock for debt securities. Under the amended agreement, the equity units now directly comprise forward purchase contracts for MetLife's common stock and an interest in MetLife's debt securities, simplifying the structure.

MetLife issued 6,857,000 shares of Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock as part of the acquisition consideration. This preferred stock is convertible into approximately 68.6 million shares of MetLife's common stock, contingent upon favorable stockholder approval. Failure to obtain this approval by November 1, 2011, could result in a $300 million payment to the seller and registration rights for the preferred stock.

Instead of a 'Keep-Well' provision where AIG would provide liquidity to ALICO Holdings LLC to meet its obligations, AIG has now provided an unconditional guarantee directly to MetLife for all of ALICO Holdings LLC's obligations related to the transaction.