UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 7, 2010
AMERICAN INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other
jurisdiction
of incorporation)
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1-8787
(Commission File Number)
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13-2592361
(IRS Employer
Identification No.) |
70 Pine Street
New York, New York 10270
(Address of principal executive offices)
Registrant’s telephone number, including area code: (212) 770-7000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions ( see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Section 1 — Registrant’s Business and Operations
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Entry into a Material Definitive Agreement. |
As of March 7, 2010, American International Group, Inc. (“AIG”) and ALICO Holdings LLC
(“Seller”) entered into a definitive agreement (the “Stock Purchase Agreement”) with MetLife, Inc.
(“MetLife”) for the sale of American Life Insurance Company (“ALICO”) by Seller to MetLife, and the
sale of Delaware American Life Insurance Company by AIG to MetLife, for approximately $15.5
billion, including $6.8 billion in cash and the remainder in equity securities of MetLife, subject
to closing adjustments.
The cash portion of the consideration from this sale will be paid to the Federal Reserve Bank
of New York (“FRBNY”) to reduce the liquidation preference of a portion of the preferred interests
owned by the FRBNY in the Seller, a special purpose vehicle formed by AIG and the FRBNY to hold the
equity of ALICO. Upon the closing of this sale to MetLife, the Seller will receive and pay to the
FRBNY approximately $6.8 billion in cash, and the Seller will hold the remainder of the transaction
consideration, consisting of 78,239,712 shares of MetLife common stock, 6,857,000 shares of newly
issued participating preferred stock convertible into 68,570,000 shares of common stock upon the
approval of MetLife shareholders, and 40,000,000 equity units of MetLife with an aggregate stated
value of $3 billion.
Each of the equity units will initially consist of an ownership interest in three series of 3%
non-cumulative junior preferred stock of MetLife and stock purchase contracts with an aggregate
stated amount of $75 per unit, which entitle the holder to receive deferrable 2% contract payments.
The stock purchase contracts, which have a weighted average life of approximately three years,
obligate the holder of an equity unit to purchase, and obligate MetLife to sell, a variable number
of shares of MetLife common stock that will be determined at the closing under the Stock Purchase
Agreement (a minimum of 67,764,000 shares and a maximum of 84,696,000 shares in the aggregate for
all equity units, subject to anti-dilution adjustments).
At closing, the equity units will be placed in escrow as collateral to secure the payment of
indemnity obligations owed by the Seller to MetLife under the Stock Purchase Agreement and other
transaction agreements. The escrow collateral will be released to the Seller over a 30 month
period, to the extent not used to make indemnity payments or to secure pending indemnity claims
submitted by MetLife. The Seller has customary indemnification obligations with respect to breaches
of representations, warranties and covenants, as well as various special indemnity obligations with
respect to losses arising from certain known circumstances, including losses with respect to
obtaining certain governmental approvals, obtaining certain contractual consents, certain
litigation and regulatory matters and certain tax matters. To the extent that the Seller does not have
sufficient assets to satisfy its indemnification obligations, AIG will provide cash or other liquid
assets to enable Seller to meet such obligations.
AIG will vote the MetLife common stock received in proportion to other MetLife shareholders.
The Seller intends to monetize the MetLife securities over time, subject to market conditions,
following the lapse of agreed-upon minimum holding periods required pursuant to the escrow
arrangements as well as pursuant to an Investor Rights Agreement, among MetLife, Seller and AIG, to
be entered into at the closing of the Stock Purchase Agreement in substantially the form attached
to the Stock Purchase Agreement (“Investor Rights Agreement”). The Seller will apply the cash
proceeds from any monetization to pay the remainder of the liquidation preference of the preferred
interests held by the FRBNY in the Seller, and thereafter the cash proceeds will be used by the
Seller and AIG to repay the outstanding balance of the lending commitment under the Credit
Agreement, dated as of September 22, 2008, between AIG and the FRBNY.
The consummation of the Stock Purchase Agreement is subject to certain conditions, including:
(i) obtaining the requisite regulatory and antitrust approvals; (ii) ALICO having a minimum total
adjusted capital to risk-based capital ratio of at least 400 percent at closing; and (iii) other
customary conditions.
The material termination provisions under the Stock Purchase Agreement allow termination (i)
by Seller or MetLife in the event that the closing has not occurred by January 10, 2011, unless the
sole reason closing has not occurred is that one or more required regulatory approvals have not
been obtained, in which case either party can extend such date until July 10, 2011 (“End Date”);
(ii) by the Seller or MetLife if there has been a material breach of any representation or
warranty, covenant or agreement of the other party such that one or more of the conditions to
closing are not capable of being fulfilled prior to the End Date or within 60 days of the notice of
such breach, if capable of being cured, but not so cured; and (iii) any governmental order from
specified governmental authorities restraining, prohibiting or making illegal the transactions
contemplated by the Stock Purchase Agreement.
AIG is assessing the financial statement effects of the transaction, including the timing and
recognition of gain or loss on the sale. In addition, as previously disclosed in its Annual Report
on Form 10-K for the year ended December 31, 2009, AIG is assessing the recoverability of goodwill
in its Foreign Life Insurance & Retirement Services — Japan & Other reporting unit.