U.S. Treasury to sell majority stake in AIG

Feds getting out of insurance game

Here for a good time, not a long time

Shares of AIG fell Monday after the U.S. Treasury Department said it plans to sell $18 billion of the company’s shares. The sale would make the government a minority shareholder, taking its stake from 53% to around 20%.

While the government was expected to unwind its stake in AIG, many thought the sale would take place over a longer period of time. AIG executives have said that they expect the government to have completely sold its position in the insurer by the end of 2013. This would be the Treasury’s largest sale of AIG shares so far, and comes as the Democratic Party looks to separate itself from bank bailouts paid during the financial crisis.

The sale would also put AIG under the purview of the Federal Reserve as a savings and loan company since it owns a small bank. AIG has said that it will buy as much as $5 billion of the offering, and last week sold its stake in Asian insurer AIA to help fund the buyback.

American Intl. Group (AIG : NYSE : US$33.30), Net Change: -0.69, % Change: -2.03%, Volume: 37,401,016

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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