AIG Divestitures Pass $65 Billion With Plane Leasing SaleZachary Tracer and Hugh Son
American International Group Inc., 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., the largest U.S. life insurer, paid more than $16 billion in 2010 for American Life Insurance Co. Fortress Investment Group LLC 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 $1.75 billion, according to data compiled by Bloomberg.
The following table lists AIG’s divestitures and the dates they were announced.
Date Unit Buyer Price($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.