AIG reiterates plans for partial spinout of Life & Retirement business via IPO
May 07, 2021 American International Group, Inc.
By: Jerry Kronenberg, SA News Editor
Insurance giant AIG (NYSE:AIG) reiterated plans Friday to spin off nearly 20% of its Life & Retirement unit via an IPO, with CEO Peter Zaffino saying that M&A offers for the division proved to be inadequate.
“With respect to the separation of Life & Retirement from AIG, we continue to work diligently and with a sense of urgency towards an IPO of up to 19.9% of the business,” Zaffino said in the company’s Q1 earnings call. “We made significant progress on several fronts, including preparing stand-alone audited financials and having an independent party conduct a thorough actuarial review. No concerns have been raised about Life & Retirement’s portfolio as a result.”
The CEO added that as he’s previously disclosed, “we did receive a number of credible inquiries from parties interested in purchasing a minority stake in Life & Retirement and our investment-management group.
We conducted a robust evaluation of those opportunities to determine if they offered a better long-term outcome for our stakeholders, [but] we believe an IPO remains the optimal path forward.”
AIG first revealed plans last October to sell a stake in its Life & Retirement business, which sells consumers life insurance and retirement-savings products like annuities. The firm has previously said it will use proceeds from the initial public offering to pay down debt.
AIG shares rose 2% Friday to close at $51.19 on word of the IPO plan and news after Thursday’s close that the company beat analyst estimates on Q1 adjusted earnings per share and other metrics.
The insurance giant reported $1.05 in adjusted Q1 EPS, exceeding analysts’ 98-cents-per-share expectations and trouncing the 12 cents of adjusted EPS that AIG reported in the same period last year.
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