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News from Reuters

AIG to sell Canadian unit to Bank of Montreal

13/01/09

NEW YORK (Reuters) - U.S. insurer American International Group , which is selling assets to raise funds to repay U.S. government loans, said on Tuesday it would sell its AIG Life Insurance Co of Canada unit to BMO Financial Group, parent of Bank of Montreal , for about C$375 million (US$308 million.)

Toronto-based AIG Life of Canada sells insurance and retirement savings products such as universal and term life plans, critical illness plans and annuities.

BMO said it will take on AIG Life of Canada's 300 employees and 400,000 customers. AIG Life of Canada sells its services through 5,000 agents across Canada, direct-to-consumer marketing and traditional employee benefit plans.

Final deal terms will reflect any change in the unit's value at the closing, which is expected by June 1 and is subject to regulatory approvals.

AIG, which since September has received $152 billion in U.S. government bailout financing to avoid collapse, is scrambling to raise cash through asset sales. Reuters on Monday reported AIG had received a first round of bids for its aircraft leasing unit and was soon expected to begin shopping its asset management business.

(Reporting by Joseph A. Giannone; editing by John Wallace)

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