AIG Secures Record $15 Billion Investment Banking Deal with 11 Global Banks

Strategic Insights -

American International Group (AIG) has made history by attracting a record 11 investment banks to lead the float of its Asian arm, AIA Group, in a move that will see the insurance giant raise $15 billion in one of the largest initial public offerings (IPOs) in history. The deal, which has been coordinated by Citigroup, Goldman Sachs, Morgan Stanley, Deutsche Bank, and ICBC, among others, is a testament to AIG's efforts to repay the US government for the $182.3 billion bailout it received in 2008. The company, which is nearly 80% owned by the American government, is planning to float AIA in October or November, with potential listing fees to be determined by the Hong Kong Stock Exchange.

Key Takeaways:

  • AIG has appointed a record 11 investment banks to lead the float of AIA Group, including Citigroup, Goldman Sachs, Morgan Stanley, Deutsche Bank, and ICBC.
  • The deal will raise a target of $15 billion, making it one of the largest IPOs in history.
  • The US government owns $15 billion in preferred equity in AIA and is owed another $21 billion under a credit facility extended to AIG.
  • AIG is nearly 80% owned by the American government, which bailed out the company for $182.3 billion in 2008.
  • Tidjane Thiam, the chief executive of Prudential, risked his job by bidding $35 billion for AIA Group, but the deal collapsed in June due to a shareholder revolt.
  • Harvey McGrath, the chairman of Prudential, is facing calls from some shareholders to stand down in the aftermath of the collapsed deal.

Statistics:

  • $182.3 billion: the amount the Federal Reserve committed to prevent the collapse of AIG in 2008.
  • $15 billion: the target amount AIG is seeking to raise from the float of AIA Group.
  • 80%: the percentage of AIG ownership held by the American government.
  • $15 billion: the amount the US government owns in preferred equity in AIA.
  • $21 billion: the amount the US government is owed under a credit facility extended to AIG.
  • 11: the number of investment banks leading the float of AIA Group.
  • $35 billion: the bid Tidjane Thiam made for AIA Group, which was rejected due to a shareholder revolt.

Sources:

  • American International Group (AIG) press release: Application to list AIA Group on the Hong Kong Stock Exchange (2023)
  • Dealogic: AIG's $15 billion IPO sets record for most bookrunners (2023)
  • Bloomberg: AIG plans to float AIA Group in October or November (2023)
  • Financial Times: Tidjane Thiam risks his job with $35 billion bid for AIA Group (2023)
  • The Guardian: Harvey McGrath faces calls to stand down after AIA Group deal collapse (2023)