MetLife Inc. may use stock to pay for more than half of the planned $15 billion purchase of an American International Group Inc. life insurance unit, said three people with knowledge of the matter.
MetLife plans to pay AIG about $8 billion in stock and the rest in cash for American Life Insurance Co., said the people, who spoke on condition of anonymity because the talks are private. Some of the cash may come from a $5 billion bridge loan from banks including JPMorgan Chase & Co., Bank of America Corp., Deutsche Bank AG and Credit Suisse Group AG, the people said.
The planned price for Alico exceeds the sum of more than 20 earlier asset sales announced by AIG since its bailout in 2008. MetLife, the largest U.S. life insurer, would expand in more than 50 nations with the purchase, including Japan and parts of Europe, Latin America and the Middle East.
"We are in a very good position to pursue acquisitions that are strategic and would accelerate our long-term growth," MetLife Chief Executive Robert Henrikson said last week in a statement in which it said it was in talks for Alico. "If we reach an agreement, it will be because the transaction meets our criteria for acquisitions, including having the potential to generate long-term value for both shareholders and customers."
The stock payment to AIG may include common shares and preferred stock, one of the people said. The transaction would leave AIG, which is majority owned by the U.S. government, with one of the biggest stakes in MetLife. AIG previously said that $9 billion from a sale or initial public offering of Alico would go toward repaying assistance from the Federal Reserve. AIG and MetLife may reach an agreement over the sale as soon as Feb. 11, the people said.
Mark Herr, a spokesman for AIG, and MetLife's Christopher Breslin declined to comment. Credit Suisse's Tamsin Blue and Deutsche Bank's John Gallagher did not immediately return calls for comment. B of A's John Yiannacopoulos had no immediate comment. JPMorgan Chase's Brian Marchiony declined to comment.