AIG to sell Alico to MetLife

The US largest insurance company MetLife (NYSE:MET) is set to purchase Alico from AIG (NYSE:AIG). This is the second deal in a weak to come from AIG as they try to repay the US Government the $182.3 billion they required for their bail out.

AIG agreed to sell its Asian life unit, American International Assurance (AIA), to Prudential (NYSE:PRU) for $35.5 billion, as we recently reported. It is believed that MetLife will pay $6.8 billion in cash and about $8.7 billion in equity to AIG for Alico. This will boost MetLife in Japan the second largest life insurance market behind Asia.

It is expected that MetLife will finance the deal by $1.75 billion in cash on hand plus $2 billion of common stock with issuances of $3.1 billion in senior debt. The deal is expected to be completed by the end of 2010.

Source online.wsj.com.