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Insurance

AIG Acquires SunAmerica in $18 Billion Stock Swap

Strategic Insights

— 1 min read

Global insurance giant American International Group Inc. (AIG) has made a significant move in the retirement planning market by acquiring SunAmerica Inc. in an $18 billion stock swap. The deal will give AIG a strong presence in the retirement planning market and new services to sell to its overseas customers. SunAmerica will continue to operate as an independent company under AIG ownership, with its Los Angeles headquarters remaining unchanged. M.R. Greenberg, AIG's chairman, hailed the deal as a strategic move that will enable AIG to introduce SunAmerica's retirement products into global markets.

Key Takeaways:

  • AIG is acquiring SunAmerica Inc. in an $18 billion stock swap, giving it a strong presence in retirement planning markets and new services to sell to its overseas customers.
  • SunAmerica will retain its name and Los Angeles headquarters, operating as an independent company under AIG ownership.
  • The deal requires approval from shareholders of both companies and federal regulators, with the completion expected late this year or early in 1999.
  • AIG has been trying to expand its presence in U.S. markets in recent years, including an attempt to buy American Bankers Insurance Group in Miami, which was outbid by Dendant.
  • The acquisition will give AIG new products to market overseas, with analysts saying it is a strategic transaction for the company.
  • Eli Broad, SunAmerica's chairman and chief executive, and Jay S. Wintrob, vice chairman of SunAmerica, are expected to join the AIG board.

Statistics:

  • Revenue of AIG in 1997: $30.6 billion.
  • Revenue of SunAmerica in 1997: $2.1 billion.
  • Number of insurance subsidiaries operating in 130 countries: over 300.
  • Countries where AIG operates: 130.
  • Timeframe for deal completion expected: late 1998 or early 1999.

Sources:

  • Associated Press, Los Angeles, "AIG to Buy SunAmerica in $18 Billion Deal"
  • AIG news release, August 1998
  • BT Alex Brown Inc. (Analyst Report)
  • Eli Broad, Chairman and CEO of SunAmerica
  • M.R. Greenberg, Chairman of AIG

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