Sam is a professional trader and the lead stock market news writer at AskTraders. After starting his career in the forex market, Sam now focuses on gold and stocks with a preference for fundamental and macroeconomic analysis.
American International Group (NYSE: AIG), a global insurance firm, yesterday announced that it is selling a 9.9% stake in its Life & Retirement Business to Blackstone for $2.2 billion.
As part of the agreement, AIG also entered into a long-term strategic asset management relationship with Blackstone. It will see Blackstone manage an initial $50 billion of Life & Retirement's existing investment portfolio, increasing to $92.5 billion over the next six years.
The closing of these transactions is expected to occur by the end of the third quarter. As a result, Jon Gray, President and CEO of Blackstone, will join the Life & Retirement Board of Directors.
Furthermore, AIG will sell certain affordable housing assets to Blackstone Real Estate for $5.1 billion in an all-cash transaction.
AIG said the transactions provide it with significant financial flexibility and support its progress towards separating its Life & Retirement business.
“Today's announcement is an important milestone for AIG. Establishing a cornerstone partnership on several fronts with such a highly regarded organization as Blackstone validates the strength of our market-leading Life & Retirement business,” said Peter Zaffino, President and CEO of AIG.
Zaffino added, “We look forward to a productive and value-enhancing partnership with Blackstone.”
AIG's share price is currently up 5.80% at $49.10 following the announcement.
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