American International Group Inc. (AIG) has agreed to sell its personal car-insurance unit to rival Zurich Financial Services AG (ZURN.VX) for $1.9 billion in cash and debt ($1.5 billion in cash and a $400 million note), marking the largest sale of an AIG business thus far and the firm’s biggest divestiture since its government rescue, Bloomberg reported.
Through this acquisition Zurich Financial becomes the third-largest U.S. personal-lines insurer passing Geico, Warren Buffett’s unit of Berkshire Hathaway Inc. Zurich already has a particularly strong presence in many Western states.
AIG CEO Edward Liddy is working to dismantle most of the New York-based international insurer to help repay parts of a $182.5 billion government bailout. AIG had been in intermittent talks with Zurich over the auto unit, one of the most resilient parts of its insurance holdings, since last year… Since on the AIG – Liddy subject — check out Tim Carney’s article in the Washington Examiner about Edward Liddy’s $3M in Goldman Sasch stock that raises apparent conflict of interest.
“Edward Liddy, CEO of government-run AIG, still owns more than $3 million of stock in Goldman Sachs, which has pocketed $13 billion or more of the $170 billion federal officials have spent bailing out the ailing Wall Street insurance giant.” Read the whole article here »