American International Group Inc. (AIG) is negotiating to buy an independent broker-dealer business from Hartford Financial Services Group Inc., an insurance rival that is divesting numerous businesses, according to people familiar with the matter.
The parties hope to finalize a deal by early August, the people said, although they cautioned talks could fall apart. The possible transaction comes as Hartford has faced criticism from big shareholder Paulson & Co., which over the past year has demanded that Hartford take action to improve its stock price.
AIG, the giant insurance conglomerate, was the recipient of one of the U.S. government's biggest bailout packages during the financial crisis of 2008-09, and remains about 60% owned by taxpayers. It has shed some of its crown jewels to pay down its debt. A transaction for the broker-dealer, while relatively small, would further signify that the insurer is seeking to expand in selected areas.
The possible purchase by AIG of Hartford's Woodbury Financial Services Inc. unit was reported over the weekend by Investment News.