American International Group sells stake in former Asian unit

City A.M. Reporter
AMERICAN International Group yesterday launched a widely expected sale of a stake in its former Asian unit AIA, providing the insurer with funding to help repurchase up to $5bn (£3.14bn) of its stock from the US government.

While the US Treasury has not yet announced another share sale, its latest lock-up expired early this month, meaning an offering would potentially bring the government’s investment below the 50 per cent mark for the first time. The Treasury yesterday declined to comment on the potential for any upcoming sales.

AIG’s sale of up to $2bn of AIA Group shares comes two days after a lock-up period on such a sale expired, but is only about a quarter of the $7.6bn stake the US insurer owned and could have sold. AIG sold $6bn worth of AIA shares in March.

AIA, Asia’s third-largest insurer, was spun out of its parent company in October 2010, when AIG Chief Executive Robert Benmosche oversaw the company’s listing in Hong Kong after a failed takeover offer from Prudential.

After a recapitalisation in early 2011, the Treasury held 92 per cent of the company, a position reduced with four sales.

Yesterday shares in AIG fell 1.69 per cent to $34.22.