AIG spinoff Corebridge valuation: Life and asset management business IPO timing and details in full
By Jenny McCall
12:51, 7 September 2022
US finance and insurance corporation, American International Group Inc (AIG), also known as AIG, has announced it will be demerging from its life asset management business. Here are the details in full.
AIG, which has been planning the spin-off from its subsidiary SAFG Retirement Services for two years now, says SAFG will be rebranded as Corebridge Financial.
American International Group Inc (AIG) share price chart
AIG is offering 80 million shares of common stock of Corebridge and has granted a 30-day option to the underwriters for the purchase of up to an additional 12 million shares of common stock.
“The initial public offering (IPO) price is currently expected to be between $21 (£18.38) and $24 per share. All of the net proceeds from the offering will go to AIG,” a statement from AIG said.
The shares are expected to trade on the New York Stock Exchange under the ticker symbol “CRBG.”
As part of the demerger, AIG has already sold a stake in its life and retirement unit to US investment firm, Blackstone, which now controls approximately 90 billion of the assets that will sit within the Corebridge portfolio, as well as a further $60bn within AIG’s core business. It is reported that Blackstone paid $2.2bn for its 9.9% stake in the business.
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Why is AIG splitting from its retirement business?
AIG wants to try and streamline its portfolio, after a strategic review. The company believes a split into separate entities will allow it to better manage its products and services. AIG sold its mortgage unit to Arch Capital for $3.4bn in 2018 and now with it spinning off its retirement business, the plan will hopefully help with the group’s overall strategy to better run its business more efficiently and effectively.
AIG will follow in the footsteps of GlaxoSmithKline (GSK), which recently separated from its consumer healthcare division, as well as 3M (MMM) and VW.
The Corebridge IPO will allow AIG to sell 19.9% of its life and retirement business. AIG is one of the largest retirement services and insurance providers in the US and it has over $411bn client assets under management (AuM).
GlaxoSmithKline (GSK) share price chart
What can AIG shareholders expect once the split takes place?
Once the split takes place, shareholders may see a decline in the value of their shares, once the Corebridge assets are removed from AIG’s balance sheet. According to research company, Macquarie Group, shareholders could be looking at a good six months of underperformance from AIG before its share price recovers.
AIG shares will continue to trade on the New York Stock Exchange as normal.
Whart is the current valuation of Corebridge?
AIG first made the announcement that it would float its retirement business back in March, valuations at the time came in at over $20bn, however, the markets have become volatile since then, due to growing geopolitical tensions, rising inflation and interest rate hikes causing havoc. As a result, Corebridge’s valuation may come down.
When will the spin-off take place?
AIG’s spin-off is still expected in 2022.
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