Report: AIG may sell US auto unit to Zurich
Report: Insurer American International Group nearing deal to sell 21st Century to Zurich
· Ieva M. Augstums, AP Business Writer
· Thursday April 16, 2009, 10:29 am EDT
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· American International Group, Inc.
CHARLOTTE, N.C. (AP) -- The insurer American International Group Inc. may be near a deal to sell its car insurance unit to rival Zurich Financial Services AG, according to a published report Thursday.
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The sale of 21st Century Insurance could be announced as early as Thursday, The Wall Street Journal reported, citing unidentified people familiar with the matter.
An AIG spokesman declined to comment. Zurich Financial spokesman Angel Serna in Zurich said the company "doesn't comment on rumors and speculation."
The price tag for the auto insurance business could be between $1.5 billion and $2 billion according to the newspaper report. The deal could strengthen Zurich's hand in the U.S. auto insurance business. Zurich owns Los Angeles-based insurer Farmers Group Inc.
If AIG sells the unit it could be the biggest deal the insurance giant has been able to agree since announcing plans to sell assets to help pay back the government.
New York-based AIG has received $182.5 billion in financial support from the government since September. The company is selling off a number of business units to repay part of the loan.
Meanwhile, AIG said Thursday it completed the sale of its wealth management arm AIG Private Bank Ltd. to Aabar Investments PJSC of Abu Dhabi.
Under terms of the agreement, the United Arab Emirates-based investment company paid about $253 million, and assumed about $55 million of intra-company loans outstanding to AIG Private Bank.
The deal, which was announced in December, is the fourth transaction AIG has closed in the past three weeks and one of 10 asset sale agreements it has reached in the past few months.
Shares of AIG rose 9 cents, or 5.6 percent, to $1.69 in morning trading Thursday. They are down from a 52-week high of $49.50.
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