AIG to sell 80 pc of lending unit to Fortress
Insurer American International Group has agreed to sell majority stake of its consumer -lending business American General Finance to Fortress Investment Group for an undisclosed amount.world Updated: Aug 12, 2010 21:47 IST
Insurer American International Group (AIG) has agreed to sell majority stake of its consumer -lending business American General Finance to Fortress Investment Group for an undisclosed amount.
However, the company has not disclosed the financial terms of the detail.
In a statement, AIG said it has, "entered into a definitive agreement whereby certain Fortress managed funds and affiliates will acquire 80 per cent of American General Finance (AGF)."
While the firm will retain remaining 20 per cent stake.
"AGF is an exceptional franchise with a strong management team and a leading platform for serving the financing needs of consumers nationwide. We believe that AGF is well-positioned for significant growth in an underserved market," said Fortress Investment Group Founder and Co-Chairman Wesley R Edens said.
The transaction, subject to regulatory approvals, is expected to close by the end of the first quarter of calender year 2011.
As a result of the transaction, AGF, which has assets of about $ 20 billion and liabilities of around $ 18 billion, including $ 17 billion of debt, would be deconsolidated from AIG's financial statements.
AGF, which was founded in 1990, provides loans, retail financing and other credit related products to more than a million families across the US and the UK.
AIG received billions of dollars in taxpayers money during the peak of financial turmoil in 2008 and in return the US government took stake in the company. After the government's bailout fund it has been selling assets to repay it. However, the firm still owes more than $ 100 billion to the government.