According to a statement by American International Group Inc’s (AIG) Chief Executive Officer Peter Zaffino last week, the company intends to use an IPO in order to sell a 19.9% stake in its life and retirement unit.
The company weighed interest from competitors, however, according to the CEO, “at this time, we believe an IPO remains the optimal path forward to maximize value for our stakeholders and to position the business for additional value creation as a stand-alone company.”
“An IPO allows AIG to retain maximum flexibility regarding the operations of the business as well as the separation process,” Peter Zaffino added.
AIG shares closed higher for a third consecutive trading session in New York on Friday. The stock went up 2.03% ($1.02) to $51.19, after touching an intraday high at $51.50, or a price level not seen since February 13th 2020 ($56.42).
Shares of American International Group Inc have risen 35.21% so far in 2021 compared with a 12.69% gain for the benchmark index, S&P 500 (SPX).
In 2020, AIG’s stock went down 26.24%, thus, it underperformed the S&P 500, which registered a 16.26% gain.
According to Zaffino, AIG is working with “urgency” to finalize the separation in 2021, but however, the timing could go into the first quarter of next year.
Adjusted pre-tax income at AIG’s life and retirement unit rose 57% year-on-year to $941 million during the first fiscal quarter.
Gross premium revenue at AIG’s general insurance business rose 6% year-on-year to $10.7 billion during the quarter and, according to Zaffino, the division will probably see revenue growth at that level during the remainder of this year.
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