AIG sells private bank to UAE's Aabar for $254mn

SELLING OFF: US-owned Manchester United's Rio Ferdinand sports an AIG-sponsored shirt. (AFP)

American International Group Inc agreed to sell its private banking unit to Abu Dhabi-based Aabar Investments PJSC for 307 million Swiss francs ($254 million), as the insurer sheds assets to pay back some costs of its $152 billion federal bailout, newswire Reuters reported on Monday.

Aabar said its purchase of AIG Private Bank also includes the assumption of up to 100 million Swiss francs ($83 million) of loans.

It said the closing price is subject to adjustment. Following the closing, AIG Private Bank will change its name and become an independent financial institution.

It will be based in Switzerland, with branches and representative offices in Dubai, Hong Kong, Shanghai and Singapore.

"This sends a clear message to our customers that we will continue to be a trustworthy, reliable and competent partner," AIG Private Bank Chief Executive Eduardo Leemann said in a statement. Leemann and his senior management team will remain with the bank.

The transaction requires regulatory approvals, including by the Swiss Federal Banking Commission.

Once the world's largest insurer by market value, AIG in September obtained a $85 billion credit line from the US government to avoid collapsing from bad mortgage bets. The size of the rescue package swelled last month to $152 billion.

AIG is trying to sell assets to repay some of its federal debts. It has said it plans to keep its US property and casualty and its foreign general insurance businesses, and maintain an ownership stake in its foreign life insurance operations.

UBS Investment Bank and the law firm Lenz & Staehelin advised AIG on the transaction. Goldman Sachs International and the law firms Clifford Chance and Baer & Karrer advised Aabar.

Abu Dhabi's state-controlled International Petroleum Investment Co will have a majority stake in Aabar following the planned conversion of a convertible bond issue into ordinary shares, Aabar said in September. (Reuters)

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