American International Group Inc. (AIG) Wednesday said Blackstone (BX) has agreed to buy 9.9% stake in AIG's Life & Retirement business for $2.2 billion in an all cash deal.
As part of the deal, AIG also agreed to enter into a long-term strategic asset management relationship with Blackstone to manage an initial $50 billion of Life & Retirement's existing investment portfolio upon closing of the equity investment, with that amount increasing to $92.5 billion over the next six years.
The transactions are expected close by the end of the third quarter. Jon Gray, President and Chief Operating Officer of Blackstone is expected to join the Life & Retirement Board of Directors.
Separately, AIG said Blackstone Real Estate Income Trust has agreed to acquire AIG's interests in a U.S. affordable housing portfolio for about $5.1 billion in an all cash transaction. This transaction is expected to close in the fourth quarter of 2021.
"Today's announcement is an important milestone for AIG. Establishing a cornerstone partnership on several fronts with such a highly regarded organization as Blackstone validates the strength of our market-leading Life & Retirement business and provides it with additional growth opportunities, provides AIG with flexibility as we continue to work to separate Life & Retirement from AIG, and results in significant new capital for AIG to deploy to support our capital management priorities," said Peter Zaffino, President and Chief Executive Officer of AIG.
AIG closed Wednesday's trading at $46.41, down $0.32 or 0.68%, on the NYSE. The stock, however, gained $2.94 or 6.33%, in the after-hours trade.
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