Shares of American International Group Inc. (AIG) and MetLife Inc. (MET) rose on Monday after Metlife and AIG settled on a $15.5 billion price tag for AIG's foreign life-insurance business, Alico. Metlife is the number one insurance seller in the country.
The deal between the two companies is multi-faceted, with the government-controlled AIG owning around a fifth of Metlife. Despite this ownership though, AIG will have no control over Metlife’s business decisions. Shares under AIG ownership will be not come with voting privileges. AIG, which is 80 percent Federally owned, will have to hold on to the shares for no less than two years. Th
The agreement prices Alico at $6.8 billion in cash and $8.7 billion in MetLife equity. AIG is now the second-largest shareholder of MetLife.
In the hours that followed shares of both companies shot up. Metlife president of International business, William Toppeta, expects the deal to "significantly accelerate" MetLife's global presence.
In Monday trading, AIG shares shot up 4.5 percent to reach a high of $30.25. At 1:37pm EST shares were at $29.06. MetLife stock also rose 4.5 percent. After a high of $41.06 in morning trading shares slipped slightly to $40.68 by early afternoon.
By 2011 MetLife anticipates an earnings rise between 45 cents to 55 cents a share by 2011.
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