NEW YORK (CNNMoney.com) -- AIG agreed Monday to sell its American Life Insurance Co. unit to MetLife Inc. for $15.5 billion in cash and stock, in beleaguered AIG's second sale of an international unit in a week.
AIG said it will sell the unit, known as Alico, for $6.8 billion in cash and the remainder in MetLife equity. The deal leaves AIG as the second-largest shareholder of MetLife, with a stake of more than 20% in the company.
Selling Alico, one of its largest international life insurance businesses, will allow government-controlled AIG to take yet another step in repaying the nearly $132 billion it borrowed from the federal government beginning in 2008 to avoid collapse.
Expected to close by the end of the year, the companies said the acquisition will also help MetLife, the largest seller of life insurance in the United States, grow internationally and especially target Japan.
The deal came a week after AIG announced an agreement to sell its Asian life insurance business, American Insurance Assurance Ltd (AIA), to Britain's Prudential PLC in a deal valued at $35.5 billion, including $25 billion in cash.
AIG said it expects to generate about $50.7 billion from these two transactions, including approximately $31.5 billion in cash to repay the New York Federal Reserve Bank and another $19.2 billion in securities that it will sell over time to repay the government.
"This sale is an important step toward repaying the government," Harvey Golub, chairman of AIG, said in a statement. "Both sales give AIG greater flexibility to move forward with our restructuring and rebuilding efforts, and focus on enhancing the value of our key insurance businesses."
At the end of February, AIG announced a loss of $8.9 billion in the fourth quarter of 2009, which it said was largely due to the costs associated with selling off large stakes in its insurance businesses to reduce the debt it owes to taxpayers.
In December, AIG sold stakes in AIA and Alico to the U.S. government. In exchange for those transactions, the Fed reduced the amount AIG has to repay taxpayers by $25 billion. AIG said it took a $5.2 billion charge for that agreement last quarter.
Some Wal-Mart employees falsely told customers Coke was more expensive in New York because of a sugar tax. More
Things aren't looking good for Sony -- the Japanese company expects to lose billions of dollars this year, as the global smartphone race heats up. More
Frederick Hutson launched Pigeon.ly in 2012 to help inmates communicate with their friends and family. He's on target for $1 million in sales this year. More
Occupy Wall Street offshoot Strike Debt says it has abolished nearly $4 million in private student loan debt for students who attended Everest College, part of Corinthian Colleges. More