METLIFE is to significantly bolster its international footprint after finalising plans to buy one of AIG’s foreign life insurance units, American Life Insurance Company (Alico) for $15.5bn (£10.2bn).
The US insurance giant announced the deal yesterday and will pay $6.8bn in cash and a further $8.7bn in MetLife equity securities for Alico.
“With this acquisition, MetLife is delivering on its strategy to accelerate international expansion as a powerful growth engine for the company,” said MetLife chairman, president and chief executive officer, Robert Henrikson.
The transaction was approved by board directors at both AIG and MetLife yesterday and is expected to close by the end of the year.
The deal will gift MetLife access to Alico’s Japanese business, which currently sits as its most profitable region and the world’s second largest life insurance market.
Alico’s Japanese arm saw pre-tax earnings of $2.2bn last year, which mostly came from its accident and health insurance business.
Bill Toppeta said: “Going forward our focus is on accelerating growth. This [deal] is about growth and not cost saving.”
The two companies will enter into an agreement that will see AIG take shares in MetLife. This will start to expire nine months after closing.
After the deal closes, MetLife will gain access to a further 19m customers across 50 countries including Chile, Russia, Brazil and Eastern Europe.