American International Group and Blackstone said they have closed on the previously disclosed deal for Blackstone to acquire a 9.9% equity stake in AIG’s Life & Retirement business and for Blackstone to manage an initial $50 billion of Life & Retirement’s existing investment portfolio.
AIG, which has its headquarters in New York previously announced the deal in July 2021 where they made it public that Blackstone agreed to acquire the stake for $2.2 billion in an all-cash transaction for 9.9% of the unit that sells insurance and annuities.
As part of the agreement, AIG also agreed to enter into a long-term strategic asset management relationship with Blackstone to manage an initial $50 billion of life and retirement’s existing investment portfolio, with that amount increasing to $92.5 billion over the next six years.
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Peter Zaffino, president and chief executive officer of AIG, called the deal an “important milestone” when it was first announced.
“Establishing a cornerstone partnership on several fronts with such a highly regarded organization as Blackstone validates the strength of our market-leading life and retirement business and provides it with additional growth opportunities, provides AIG with flexibility as we continue to work to separate life and retirement from AIG, and results in significant new capital for AIG to deploy to support our capital management priorities,” he said. “We look forward to a productive and value-enhancing partnership with Blackstone as we continue to build momentum on our journey to become a top-performing company.”
The completion of the deal follows several changes to AIG’s senior leadership team as part of the separation of its L&R business. The insurer first made its plans to separate the L&R business known in October 2020, following a strategic review. Do well to check out how AIG return of premium life insurance works.