METLIFE is eyeing a $14bn (£8.56bn) bid for AIG’s American Life Insurance Co in a deal that could repay US taxpayers billions.
The rescue of AIG has already reaped huge paper profits for the Federal Reserve and analysts say the sale could enable AIG to pay up to $9bn back into the public coffers.
The sale would be the largest AIG has been involved in since it was bailed out with an aid package of $180bn in 2008. The insurer is still 80 per cent owned by the US Treasury and is under pressure to repay some of the money it owes.
American Life Insurance Co (Alico) is one of the largest international platforms for life insurance in the world, selling life insurance and retirement products to 19m customers in 54 countries. If a deal was struck it would allow MetLife, the largest publicly traded US life insurer, access to some of the fastest-growing global markets.
MetLife chief executive Robert Henrikson hinted a big deal may be on the cards, saying the company was “wide open” to acquisitions that would allow it to quickly expand. He also said the company would be able to pay the $14bn that Citigroup analyst Colin Devine suggested Alico may cost.
If the Alico sale does not materialise AIG is mulling over an initial public offering of the company. Meanwhile, the Federal Reserve is believed to have made billions in paper profits from its efforts to unwind credit insurance contracts that AIG provided.
The central bank has benefited from a rise in the price collateralised debt obligations it bought from AIG as part of its rescue.