American International Group Inc. has won a strong base in bank distribution of fixed annuities, a bigger domestic life insurance business, and entry into consumer finance by defeating Prudential PLC in the bidding war for American General Corp.

American General “fits us hand in glove,” said Maurice “Hank” Greenberg, chairman and chief executive officer of New York-based AIG. “It gives us retirement savings and a bigger stake in U.S. life” insurance.

Distribution and cross-selling opportunities created by the deal will “benefit all parts of the business,” Mr. Greenberg said.

He said he expects to wring pretax savings of about $400 million out of the combined operation in the first year after the purchase, which is scheduled to take place in three to four months.

The $23 billion stock deal was announced early Friday. American General also paid the London insurer a $600 million breakup fee.

Robert M. Devlin, American General’s CEO and chairman, said he looks forward to taking advantage of the broker-dealer distribution network of AIG’s SunAmerica Inc.’s variable annuities.

“We see this as an excellent fit, an opportunity to build on our annuity asset accumulation,” Mr. Devlin said.

Last year the two companies had a combined $15 billion of annuity deposits, 40% more than their nearest competitor, he said. “This is also a great opportunity to strengthen our market position.”

Colin Devine, an equity analyst at Citigroup Inc.’s Salomon Smith Barney in New York, said the deal has great cross-selling opportunities.

“It’s safe to say that AIG was a nonfactor in the U.S. life business, while AG is the fifth-biggest life insurer in the U.S.,” he said. “SunAmerica is going to be able to sell American General’s variable life products through its broker/dealer network. SunAmerica is also going to be able to take advantage of American General’s relationships with banks and sell variable annuities. Let’s be honest, SunAmerica didn’t get very far selling the products through banks before.”

Joseph Correnti, director of research at Wayne Hummer Investments, a Chicago retail investment company, said AIG will increase its business the most in consumer finance.

“AIG has no presence in consumer finance — there will be no overlap,” Mr. Correnti said.

Mr. Greenberg said American General’s headquarters would remain in Houston.

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