al_gy
03-08-2010, 09:53 PM
AIG to get MetLife stake in $15 bln unit sale (https://news.fidelity.com/news/news.jhtml?articleid=201003072028RTRSNEWSCOMBINED_ N07141732_1&IMG=N&cat=Corp.MNA&srcIndex=6)
Reuters — 03/07/10
* MetLife (MET (https://qr.fidelity.com/embeddedquotes/redirect/research?symbol=MET)) common, equivalent to give AIG 14 pct stake. * AIG gets about $3 bln convertible preferred stock. * MetLife (MET) sees deal accretive by ...</B> :(
AIG: $51 billion down, $51 billion to go (https://news.fidelity.com/news/news.jhtml?articleid=201003081342CNN_____MONEY____-2010-03-08-news-companies-aig_payback-index_htm&IMG=N&cat=CompanyNews&srcIndex=9)
CNNMoney.com — 01:43 ET 03/08/10
After selling off its second "crown jewel" :washboard:insurance business in a week, AIG has made a sizeable dent in its plan to repay its debt to taxpayers. But the troubled insurer ...</B>
MetLife seals Alico deal after two-year quest:lmfao:
REUTERS — 1:46 PM ET 03/08/10
By Paritosh Bansal
NEW YORK (Reuters) - MetLife Inc (Symbol : MET (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=MET) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) pursued AIG's foreign life insurance business for two years before finally clinching a $15.5 billion purchase that will give it beachheads in 47 nations from Peru to Bangladesh.
The deal will help MetLife, already the largest life insurer in the United States and Mexico, diversify revenue by product, distribution and geography.
It comes a week after American International Group Inc agreed to sell its Asian life unit, American International Assurance (AIA), to Britain's Prudential for $35.5 billion, the largest deal ever in the insurance sector.
AIG is raising funds to repay a massive government bailout.
"The AIA deal really is an Asia deal. Ours is really a global deal," William Toppeta, president of MetLife's international business, told Reuters in an interview. "It is really about the growth opportunities in a lot of parts of the world and not just about Asia."
MetLife shares rose 4 percent to their highest level in nearly six months, and AIG rose 3.4 percent.
Bill Bergman, an analyst at Morningstar, said more competition in the developing world may make those markets less attractive than they have been. But he added, "The market seems to think it makes sense for MetLife."
MetLife first started eyeing AIG's American Life Insurance Co (Alico), which sells life, accident and health insurance as well as retirement and wealth management products in 55 countries, in the months before AIG nearly collapsed in September 2008.
"The first time that we focused most intensively on Alico would have been in 2008, probably the early part of 2008," Toppeta said. "And then, of course, the events of the summer and fall of 2008 sort of overtook everybody."
MetLife said it would pay $6.8 billion in cash and $8.7 billion in equity for Alico, confirming an earlier Reuters report.
For U.S. taxpayers, who have committed $182.3 billion to bailing out AIG, the deal will help them recover billions of their rescue funds, although they are probably still years away from untangling themselves totally from the once-mighty insurer.
With the AIA and Alico deals, AIG plans to repay the Federal Reserve Bank of New York about $31.5 billion in cash, with more expected as it sells Prudential and MetLife securities over time.
The proceeds should help the insurer pay down all of its New York Fed debt, but it will still leave the government holding roughly $47 billion in equity investments, including the amount drawn under a $30 billion equity line. The government also has a nearly 80 percent stake in AIG.
To exit from AIG completely, the government is likely to follow a strategy similar to what it has used with Citigroup Inc (Symbol : C (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=C):hellowave:) in a process that will probably take years.:eek:
"It's a step in the right direction -:hmmmm:- liquefying its better assets and paying back the taxpayer. But the prospects there are still very uncertain," Bergman said, referring to AIG.:lmfao:
METLIFE GOES GLOBAL
Thanks to the acquisition of Alico, founded in 1921, MetLife will get a special boost in Japan, the world's second-largest life insurance market, which accounted for 70 percent of Alico's pre-tax operating income in fiscal year.
Alico will also strengthen MetLife's position in Europe and move it into a top five market position in many emerging markets in Central and Eastern Europe, the Middle East and Latin America.
MetLife expects the deal to increase its 2011 operating earnings per share by 45 cents to 55 cents, excluding one-time expenses of 12 cents. It sees annualized post-tax cost savings of $50 million to $75 million.
Analysts, on average, expected MetLife to post a profit of $4.89 per share in 2011, according to Thomson Reuters I/B/E/S.
Early last year, MetLife offered about $11 billion for Alico, but AIG avoided a fire sale:hellfire: after the New York Fed, advised by Morgan Stanley (Symbol : MS (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=MS)) , agreed in March 2009 to swap its debt into equity in special purpose vehicles that AIG created to hold AIA and Alico.:turtleride::moped::cycle::slots:
METLIFE STAKE
The equity portion of the price for Alico consists of $3 billion in MetLife common stock, $2.7 billion in contingent convertible preferred stock, and $3 billion of equity units.
The common stock and equivalents would give AIG a 14 percent ownership in MetLife, MetLife Chief Financial Officer William Wheeler said.
The equity units are set to convert into common shares roughly three years after closing, Wheeler said. Taking those into account, AIG's ownership in MetLife would go above 20 percent, sources familiar with the matter said on Sunday.
But Wheeler said he expected AIG to start selling the shares as soon as it could under a lock-up agreement.
"I am not sure how much shares they will own at any one time, but I suspect it won't get close to 20 percent," Wheeler said.
AIG's stake comes with voting restrictions and does not give it a right to name anyone to MetLife's board. AIG must vote its shares in proportion to the way the rest of MetLife's outstanding shareholders do, Wheeler said.
MetLife expects to finance the cash portion of the deal with issuances of $3.1 billion in senior debt and $2 billion of common stock, as well as $1.75 billion in cash on hand.
Both boards have approved the transaction, which the companies expect to close by the end of 2010.
Credit Suisse (Symbol : CS (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=CS) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) was lead adviser to MetLife, which was also advised by Barclays Capital , Bank of America Merrill Lynch , Deutsche Bank (Symbol : DB (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=DB) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) and HSBC (Symbol : HBC (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=HBC) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) .
AIG is being advised by Citigroup, Goldman Sachs (Symbol : GS (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=GS) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) and Blackstone Group (Symbol : BX (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=BX) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) , according to several sources.
(Editing by Lisa Von Ahn, Dave Zimmerman and John Wallace)
Reuters — 03/07/10
* MetLife (MET (https://qr.fidelity.com/embeddedquotes/redirect/research?symbol=MET)) common, equivalent to give AIG 14 pct stake. * AIG gets about $3 bln convertible preferred stock. * MetLife (MET) sees deal accretive by ...</B> :(
AIG: $51 billion down, $51 billion to go (https://news.fidelity.com/news/news.jhtml?articleid=201003081342CNN_____MONEY____-2010-03-08-news-companies-aig_payback-index_htm&IMG=N&cat=CompanyNews&srcIndex=9)
CNNMoney.com — 01:43 ET 03/08/10
After selling off its second "crown jewel" :washboard:insurance business in a week, AIG has made a sizeable dent in its plan to repay its debt to taxpayers. But the troubled insurer ...</B>
MetLife seals Alico deal after two-year quest:lmfao:
REUTERS — 1:46 PM ET 03/08/10
By Paritosh Bansal
NEW YORK (Reuters) - MetLife Inc (Symbol : MET (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=MET) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) pursued AIG's foreign life insurance business for two years before finally clinching a $15.5 billion purchase that will give it beachheads in 47 nations from Peru to Bangladesh.
The deal will help MetLife, already the largest life insurer in the United States and Mexico, diversify revenue by product, distribution and geography.
It comes a week after American International Group Inc agreed to sell its Asian life unit, American International Assurance (AIA), to Britain's Prudential for $35.5 billion, the largest deal ever in the insurance sector.
AIG is raising funds to repay a massive government bailout.
"The AIA deal really is an Asia deal. Ours is really a global deal," William Toppeta, president of MetLife's international business, told Reuters in an interview. "It is really about the growth opportunities in a lot of parts of the world and not just about Asia."
MetLife shares rose 4 percent to their highest level in nearly six months, and AIG rose 3.4 percent.
Bill Bergman, an analyst at Morningstar, said more competition in the developing world may make those markets less attractive than they have been. But he added, "The market seems to think it makes sense for MetLife."
MetLife first started eyeing AIG's American Life Insurance Co (Alico), which sells life, accident and health insurance as well as retirement and wealth management products in 55 countries, in the months before AIG nearly collapsed in September 2008.
"The first time that we focused most intensively on Alico would have been in 2008, probably the early part of 2008," Toppeta said. "And then, of course, the events of the summer and fall of 2008 sort of overtook everybody."
MetLife said it would pay $6.8 billion in cash and $8.7 billion in equity for Alico, confirming an earlier Reuters report.
For U.S. taxpayers, who have committed $182.3 billion to bailing out AIG, the deal will help them recover billions of their rescue funds, although they are probably still years away from untangling themselves totally from the once-mighty insurer.
With the AIA and Alico deals, AIG plans to repay the Federal Reserve Bank of New York about $31.5 billion in cash, with more expected as it sells Prudential and MetLife securities over time.
The proceeds should help the insurer pay down all of its New York Fed debt, but it will still leave the government holding roughly $47 billion in equity investments, including the amount drawn under a $30 billion equity line. The government also has a nearly 80 percent stake in AIG.
To exit from AIG completely, the government is likely to follow a strategy similar to what it has used with Citigroup Inc (Symbol : C (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=C):hellowave:) in a process that will probably take years.:eek:
"It's a step in the right direction -:hmmmm:- liquefying its better assets and paying back the taxpayer. But the prospects there are still very uncertain," Bergman said, referring to AIG.:lmfao:
METLIFE GOES GLOBAL
Thanks to the acquisition of Alico, founded in 1921, MetLife will get a special boost in Japan, the world's second-largest life insurance market, which accounted for 70 percent of Alico's pre-tax operating income in fiscal year.
Alico will also strengthen MetLife's position in Europe and move it into a top five market position in many emerging markets in Central and Eastern Europe, the Middle East and Latin America.
MetLife expects the deal to increase its 2011 operating earnings per share by 45 cents to 55 cents, excluding one-time expenses of 12 cents. It sees annualized post-tax cost savings of $50 million to $75 million.
Analysts, on average, expected MetLife to post a profit of $4.89 per share in 2011, according to Thomson Reuters I/B/E/S.
Early last year, MetLife offered about $11 billion for Alico, but AIG avoided a fire sale:hellfire: after the New York Fed, advised by Morgan Stanley (Symbol : MS (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=MS)) , agreed in March 2009 to swap its debt into equity in special purpose vehicles that AIG created to hold AIA and Alico.:turtleride::moped::cycle::slots:
METLIFE STAKE
The equity portion of the price for Alico consists of $3 billion in MetLife common stock, $2.7 billion in contingent convertible preferred stock, and $3 billion of equity units.
The common stock and equivalents would give AIG a 14 percent ownership in MetLife, MetLife Chief Financial Officer William Wheeler said.
The equity units are set to convert into common shares roughly three years after closing, Wheeler said. Taking those into account, AIG's ownership in MetLife would go above 20 percent, sources familiar with the matter said on Sunday.
But Wheeler said he expected AIG to start selling the shares as soon as it could under a lock-up agreement.
"I am not sure how much shares they will own at any one time, but I suspect it won't get close to 20 percent," Wheeler said.
AIG's stake comes with voting restrictions and does not give it a right to name anyone to MetLife's board. AIG must vote its shares in proportion to the way the rest of MetLife's outstanding shareholders do, Wheeler said.
MetLife expects to finance the cash portion of the deal with issuances of $3.1 billion in senior debt and $2 billion of common stock, as well as $1.75 billion in cash on hand.
Both boards have approved the transaction, which the companies expect to close by the end of 2010.
Credit Suisse (Symbol : CS (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=CS) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) was lead adviser to MetLife, which was also advised by Barclays Capital , Bank of America Merrill Lynch , Deutsche Bank (Symbol : DB (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=DB) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) and HSBC (Symbol : HBC (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=HBC) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) .
AIG is being advised by Citigroup, Goldman Sachs (Symbol : GS (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=GS) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) and Blackstone Group (Symbol : BX (http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=BX) https://scs.fidelity.com/common/always-cached/embeddedquotes/1.0/images/retailLoader_lg.gif Loading... ) , according to several sources.
(Editing by Lisa Von Ahn, Dave Zimmerman and John Wallace)