U.S. Treasury Prepares For AIG (AIG) Exit
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The Treasury Department could announce plans for American International Group Inc. (NYSE: AIG) to regain its independence from the government after the insurer’s bailout by the taxpayers, according to people familiar with the matter cited by Bloomberg on Monday.
As a part of the strategy, the Treasury could begin to convert its $49 billion preferred stake into common stock to be sold in the first half of next year.
The announcement of the plans could come as soon as this week according to the sources cited by Bloomberg, but if the pace of the negotiations slows then the plans could become public later.
AIG is preparing to liquidate two of its non-U.S. divisions that would allow the insurer to pay back its bailout funds.
MetLife Inc. (NYSE: MET) announced earlier this month that it will buy American Life Insurance Co. for $15.5 billion from AIG, while the insurer is also planning an October initial public offering for it AIA Group Ltd. unit. The Asian unit will go public in Hong Kong on October 29, but AIG will be required to maintain a 30 percent stake in the business for the first year after the IPO.
According the AIG’s chief executive officer Robert Benmosche, the government’s exit from AIG would mirror that of Citigroup Inc. (NYSE: C), where the government sold shares are sold through a set trading program. The Treasury still owns an 18 percent stake in Citigroup.
Shares of AIG are up 42 cents to $36.89 in early market trade on Monday. AIG shares are up 22 percent this year on the New York Stock Exchange.
As a part of the strategy, the Treasury could begin to convert its $49 billion preferred stake into common stock to be sold in the first half of next year.
The announcement of the plans could come as soon as this week according to the sources cited by Bloomberg, but if the pace of the negotiations slows then the plans could become public later.
AIG is preparing to liquidate two of its non-U.S. divisions that would allow the insurer to pay back its bailout funds.
MetLife Inc. (NYSE: MET) announced earlier this month that it will buy American Life Insurance Co. for $15.5 billion from AIG, while the insurer is also planning an October initial public offering for it AIA Group Ltd. unit. The Asian unit will go public in Hong Kong on October 29, but AIG will be required to maintain a 30 percent stake in the business for the first year after the IPO.
According the AIG’s chief executive officer Robert Benmosche, the government’s exit from AIG would mirror that of Citigroup Inc. (NYSE: C), where the government sold shares are sold through a set trading program. The Treasury still owns an 18 percent stake in Citigroup.
Shares of AIG are up 42 cents to $36.89 in early market trade on Monday. AIG shares are up 22 percent this year on the New York Stock Exchange.
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