AIG Closes On $2.2B Life & Retirement Deal With Blackstone

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By John Hilton

American International Group's deal to sell a 9.9% equity stake in AIG’s Life & Retirement business to Blackstone for $2.2 billion in an all-cash transaction has officially closed, the company announced today.

As part of this agreement, 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.

Jon Gray, president and chief operating officer of Blackstone, joins the Life & Retirement Board of Directors as part of the deal.

AIG announced the planned sale of its Life & Retirement business in October, succumbing to pressure from high-profile investors to split it off from the insurer's P&C operations. There are no plans to break up the Life & Retirement business, AIG President and CEO Peter Zaffino has said.

The insurer hoped to sell a 19.9% stake in the Life & Retirement business. When the Blackstone deal was announced in July, Zaffino suggested that AIG will continue efforts to find additional partners beyond the Blackstone deal for 9.9%.

“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,” Zaffino said.

The Blackstone Group Inc. is an American alternative investment management company based in New York City. In 2019, Blackstone converted from a publicly traded partnership into a corporation.

Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate business has actively acquired commercial real estate. As of 2021, the company's total assets under management were approximately $649 billion.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.