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.

This comes after American International Group Inc (AIG) announced yesterday that current and former employees of its Financial Products unit had to accept cuts totaling about $20 million in retention payments, this is still short of a $26 million target.

AIG was bailed out by the U.S Government for $182.3 billion lawmaker Darrell Issa who investigated the payout to AIG said that “it’s not a question if the bonuses are justified, but if AIG are being transparent.” An uproar from the American public evolved last March after AIG paid $165 million to employees.

AIG asked the unit’s current and former employees to make up for the difference by taking cuts from the $195 million in retention payments that were due this March. To read more on this story go to nytimes.com.

AIG said its net income rose to $455 million, or 68 cents per share, an improvement over the $24.5 billion loss from a year earlier. Sales for the New York-based company rose 189% to $26 billion, topping analysts’ forecasts of $23 billion.

Robert Benmosche the Chief Executive for AIG said employees are working to preserve the strength of our insurance businesses in a challenging market.”

In August, AIG reported that it had returned to profitability after six straight losing quarters. The return to more solid footing also put the company in a better position to pay back the $89.3 billion it owes taxpayers.

To read more on this story go to money.cnn.com.

HSBC (LON:HSBA) could be set to purchase the Asian businesses of American International Group Inc (AIG) the troubled US insurer. The deal could be worth around $8.7 billion according to analyst James Hutson at Keefe, Bruyette & Woods.

HSBC posted pre-tax profits showing that 16 percent was contributed by the banks insurance business in the first half of 2008. While HSBC have said they have no plans to rush and buy up assets, Hutson believes that buying the Asia life business of AIG is a feasible measure to achieve its target insurance contribution of 20 percent.

Hutson believes that HSBC has virtually no want to enter the Japanese market and considers other non-Asian businesses will also be of little interest to the bank, leaving the other Asian businesses which is believed to be at least 50 percent Hong Kong based. HSBC own 18 percent market share in Hong Kong Life, if they did decide to purchase AIG the deal would most probably double its market share.

Source: Guardian The Gunman the movie

November 10. Just two months after the US government bailed out American International Group Inc (AIG) with £85 billion, the US treasury announced that they will be buying $40 billion of AIG’s preferred shares, there will also be two new emergency loan units opened by the Federal Reserve to finance the company’s securities.

The original loan was given to prevent extensive default against AIG creditors at the beginning of the Wall Street Crisis when Lehman Brothers Collapsed. The new government assisted loan terms will cost a lot less than the original loan to AIG which was made on September 16.

As the US economy worsened with September seeing the loss of 524,000 jobs and October seeing an increase of 6.5 percent in employment the Treasury and the Feds are restructuring AIG’s bailout deal so the giant insurer can survive.

In a report out today on AIG it is said they lost a record $24.5 billion, which works out to $9.05 a share in the period ending September 30. A year earlier AIG saw profits of $3.9 billion which works out as each share gaining $1.19.

Source: Bloomberg

Prudential shares surged yesterday after the revelation that the firm is planning to bid for AIG’s Asian business for £8.6 billion, possibly backed up by sovereign wealth funds investments. It has now been reported that Prudential have run into profit.

Over the first 9 months 2008 Prudential have reported a 15 percent increase in sales compared to the same time last year. Prudential chief executive Andrew Tucker said: “We are of course monitoring closely AIG’s disposal programme and considering what, if any, opportunities may arise that would create additional value for our shareholders.” Although he did add to the statement that he could not comment on how the deal would be financed as it is too soon.

However, Prudential shares have fallen to 3.26p from 4.25p, with Standard Life down 4.75p to 230.25p
Overall, it’s looking slightly brighter on the global money markets with Asian markets high, Wall Street up more than 400 points overnight and the FTSE 100 already reaching 4347 at one point this morning.

Source: Guardian

In London today at 12.18pm the FTSE 100 gained 84.07 points at 4147.08. However the FTSE 250 was sliding down 11.25 points at 6299.58.

Prudential was doing well on the FTSE 100, and gained 37.25p or 13.8 percent at 307.25p this comes as talks that prudential were setting themselves up to buy the Asian assets of AIG, the American insurance giant who has fallen victim to the credit crunch.

If the deal goes through it is believed that for the sovereign investment funds Prudential could end up with £1.2 billion for the purchase in return for around a 15-20 percent stake in AIG.

Prudential figures are due out tomorrow and should end the speculation as to the position of the insurance company as traders have said they are confident about them, although skeptics have said although Prudential will be keen to buy the Asian arm of AIG, that Pru would find it hard to fund the deal, as Pru’s market capitalization after its fall last week now only stands at 6.6 billion.

Source: independent

American International Group Inc the giant insurer who had to be bailed out by the US government last month is being investigated by lawmakers, asking questions as to how it played its role in the chain of events leading to the $700 billion to rescue the financial industry amid the financial crisis that has hit globally.

One of AIG’s chief executive officers Maurice “Hank” Greenberg as well as two other CEO’s is to testify before the House Oversight and Government Reform Committee, in the two day hearing they have to talk about regulatory mistakes and financial excesses which has led to continuing fears of global recession.

Lehman Brothers CEO also testified yesterday in-front of the congressional oversight panel, but answers did not flow from the Lehman Brothers stand regarding the collapse of the credit market amid the September events.

Source: India Express

AIG may be looking for buyers for some of its $16 billion global real estate holdings to pay back the US government loan. The Giant US insurer took an $85 billion loan from the federal government last week to allow the insurer to continue trading.

American International Group will not be hard pushed to find eager buyers for property it owns, the insurer owns property in 14 US cities and 30 countries as well as three office buildings in Manhattan with 2 million square foot. Many of AIG properties will be extremely sought after due to them not being up for sale regularly.

AIG share price shot up 21 percent on Tuesday in New York trading.

Read the full article in the Bloomberg

If the financial markets were not already in turmoil, Wednesday trading battered the share prices even more, sending the European and US share prices plunging following the news that British bank HBOS are in talks to be taken over and the huge federal bailout of one of the world’s largest insurers AIG.

Wall Street took a pounding when fears the US governments $85 billion loan to American International Group may not be enough to stabilize the insurer in the crumbling financial markets. On Wednesday The White House said that the United States had enough strength to overcome the current financial crisis and that recent US economic news showed a very mixed picture.

Although earlier on Wednesday the bailout of AIG had cheered European and Asian exchanges, the Dow Jones Industrial average fell by 2.48 percent to 10,785.20 while Nasdaq was down 3.47 percent to 2,138.06 in mid-afternoon deals.

The FTSE 100 index in London slid 2.25 percent to 4,912.40 points, also the Frankfurt Dax slid 1.75 percent at 5,860.98 and over in Paris the CAC 40 list 2.14 percent to 4,000.11 points. The AIG collapse could set off a wave of failures elsewhere analysts warned.

Read the full article in afp.google