American International Group (AIG) has revealed plans to sell a 20% stake in Corebridge Financial to Nippon Life Insurance of Japan for $3.8 billion. This move is in line with AIG's ongoing efforts to decrease its interests in the life and retirement sector, a business unit that was spun off as a separate entity in 2022 in response to pressure from activist investors.
In the deal, AIG will be offloading 120 million shares priced at an average of $31.47 per share. While the specific utilization of the proceeds from the sale has not been specified, AIG has previously hinted at the possibility of using them for stock buybacks. Prior to this agreement, AIG held a majority stake of nearly 53% in Corebridge, but CEO Peter Zaffino has made a commitment to divest the remaining ownership following the current transaction, while retaining a 9.9% stake for two years post-closure.
The sale of the 20% stake in Corebridge Financial to Nippon Life Insurance is expected to enhance the Japanese insurer's presence in the U.S. market. Nippon Life, known for being one of Japan's largest life insurance companies with a client base of 15 million, also operates in several other countries including Australia, India, Myanmar, China, Thailand, and Indonesia. J.P. Morgan Securities has provided advisory services to AIG for this transaction, with the deal slated to be finalized by the first quarter of 2025.