American International Group Inc. agreed to sell an Asian life insurance unit with 20 million customers to Prudential PLC for $35.5 billion in the company's biggest divestiture since it was bailed out by the U.S.
Prudential, Britain's biggest insurer, will pay $25 billion in cash and $10.5 billion in stock and other securities for AIA Group Ltd., the London company said Monday. The sum raised in the sale would exceed the total of more than 20 other deals announced by AIG since its 2008 rescue.
AIG gave a $9 billion stake in American Life Insurance Co. and $16 billion in AIA, its biggest non-U.S. life insurance units, to the Federal Reserve in December. AIG will redeem the Fed's $16 billion interest in AIA with proceeds from the sale and repay about $9 billion more on its Fed credit line, it said Monday.
The $10.5 billion in securities obtained from Prudential will be sold "over time, subject to market conditions, following the lapse of agreed-upon minimum holding periods," AIG said. Proceeds will be used to repay debt on the credit line, it said.
AIG owed about $25 billion on the line as of last week. AIG had drawn more than $40 billion before reducing the sum in December when it turned over stakes in the units.
Prudential PLC has no relation to Prudential Financial Inc. of Newark, N.J., and operates in the U.S. through its Jackson National Life Insurance Co. unit.
