Posted on 05 Mar 2010
A lingering tax issue may soon be resolved, paving the way for American International Group, Inc. (AIG) to sell its foreign life insurance unit to MetLife for $15 billion.
The deal, for AIG’s American Life Insurance Co. (ALICO), is not final but could be signed as early as this weekend, according to Reuters.
One issue holding up the deal has been concerns about tax liabilities for ALICO, which sells most of its products outside of the United States, therefore not withholding U.S. taxes on distributions to foreign policyholders, the report said. The Internal Revenue Service is expected to rule in favor of ALICO’s position, allowing MetLife to avoid a tax liability in the future, Reuters reported.
ALICO, headquartered in Wilmington, Del., sells 19 million insurance products to more than 50 countries across the globe.
Its sale would be another big move for AIG, which recently sold its Asian life unit, American International Assurance (AIA), to Prudential PLC for $35.5 billion, one of the larges insurance deals in history and another step for the troubled insurer to pay back nearly $180 billion in U.S. government aid it received to avoid insolvency.