AIG Divestitures Pass $65 Billion With Plane Leasing Sale

American International Group Inc. (AIG), built by Maurice “Hank” Greenberg into the world’s largest insurer, has shrunk by half through a series of asset sales that ended this week with the divestiture of a plane-leasing unit.

The contraction began in 2008, the year AIG needed a U.S. bailout, and included the sale of units from Hong Kong to Israel, and real estate from New York to Tokyo. The deals helped narrow the company’s focus and generated about $79 billion for AIG, which returned the last of the taxpayer funds in 2012.

“They sold off a great many of the crown jewels,” Greenberg, who led AIG for almost four decades through 2005, said in a 2011 interview on Bloomberg Television. “How long is it going to take to rebuild?”

The insurer’s market value is about $76 billion, compared with $148 billion at the end of 2007. The employee count is down 45 percent in the six years ended Dec. 31 to 64,000.

Investment banks, buyout firms and insurers were among those who benefited from New York-based AIG’s distress. MetLife Inc. (MET), the largest U.S. life insurer, paid more than $16 billion in 2010 for American Life Insurance Co. Fortress Investment Group LLC (FIG) paid $125 million that year for most of AIG’s subprime lender. Fortress’s stake in the business, now named Springleaf Holdings Inc., is valued at about $1.75 billion, according to data compiled by Bloomberg.

Photographer: Jonathan Fickies/Bloomberg

"They sold off a great many of the crown jewels," Maurice "Hank" Greenberg, who led American International Group Inc. for almost four decades through 2005, said in a 2011 interview on Bloomberg Television. Close

"They sold off a great many of the crown jewels," Maurice "Hank" Greenberg, who led... Read More

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Photographer: Jonathan Fickies/Bloomberg

"They sold off a great many of the crown jewels," Maurice "Hank" Greenberg, who led American International Group Inc. for almost four decades through 2005, said in a 2011 interview on Bloomberg Television.

The following table lists AIG’s divestitures and the dates they were announced.

    Date                     Unit             Buyer    Price($m)
 9/29/08     London airport stake     Credit Suisse        n/a
11/26/08  Stake in Brazil venture          Unibanco        820
 12/1/08             Private Bank             Aabar        308*
12/19/08    German insurance unit     Augur Capital         26
12/22/08           Hartford Steam         Munich Re        815*
 1/13/09       Canadian life unit  Bank of Montreal        263
 1/19/09     Commodity index unit            UBS AG         15**
 1/23/09        Philippines units East West Banking         49
  2/5/09               Thai units   Bank of Ayudhya         45
 3/26/09   Taiwan securities unit   Bank of E. Asia        n/a
 4/16/09   21st Century Insurance  Zurich Financial      2,000*
 5/11/09       Japan headquarters       Nippon Life      1,200
  6/2/09  Argentine finance units  Banco de Galicia         69
  6/4/09   Transatlantic Holdings   public offering      1,136+~
  6/9/09    New York headquarters             Kumho        n/a
 6/19/09           ForEx platform       BNP Paribas        n/a
 6/24/09          Mexican finance Afirme, Consorcio        n/a
 6/29/09             Russian bank        Banque PSA        n/a
 6/30/09  Taiwan credit-card unit       Far Eastern        n/a
 7/28/09   Life insurance finance          Wintrust        680^
 7/29/09  Polish consumer finance   Banco Santander        n/a
 8/11/09            Energy assets   multiple buyers      1,900^^
 8/12/09        Hong Kong finance  China Construct.         70
 8/12/09  India information tech.           Mphasis        n/a
  9/5/09          AIG Investments   Pacific Century        500
12/23/09 Israeli mortgage insurer   Harel Insurance         36
  1/5/10  Canada mortgage insurer  Ontario Teachers        n/a
  3/8/10                    Alico           MetLife     16,400
  3/9/10   Transatlantic Holdings   public offering        452~
 4/13/10           53 ILFC planes   Macquarie Group      1,987
 8/11/10 American General Finance          Fortress        125
 9/30/10             Star, Edison   Prudential Fin.      4,800*
10/22/10           AIA Group Ltd.   public offering     20,500+~
 1/12/11            Nan Shan Life         Ruen Chen      2,160
 4/18/11         Railroad leasing  Perella Weinberg        n/a
  7/7/11    New Jersey apartments   multiple buyers        242
  3/6/12           AIA Group Ltd.        share sale      6,000~
 6/26/12         Two runoff units   White Mountains         35
  9/6/12           AIA Group Ltd.        share sale      2,000~
12/18/12           AIA Group Ltd.        share sale      6,450~
12/16/13    Aircraft leasing unit            AerCap      7,600#

Total                                                   78,683

Notes: Some company names have been abbreviated for space. *Includes assumed debt.

**Excludes potential $135 million payment based on future performance.

+Includes sale of additional shares later in the month.

~AIG divested in multiple offerings.

^Excludes potential purchase of assets for $61.2 million.

^^Includes previously disclosed deals such as Spanish solar plants to HG Capital, interests in oil and gas contracts to an undisclosed buyer and stakes in gas storage and marketing ventures to Tenaska.

#Includes $3 billion in cash and 97.6 million AerCap shares. Valuation is based on AerCap’s May 13 closing price.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Hugh Son in New York at hson1@bloomberg.net

To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net Dan Reichl

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