More Videos
- Elpida, Taiwanese Chipmakers to Integrate
- Australia Consumers Fearful Despite Stimulus
- AIG May Sell Auto Unit to Insurer Zurich
- Australia's CBA May Cut Dividend as First-Half Falls
- Asian Stocks Slide as US Rescue Plan Disappoints
- Sirius XM Prepares Possible Bankruptcy Filing
- Nvidia Results Miss Estimates; Shares Fall
- Applied Materials Reports Sharply Lower Results
- Stimulus Plan: Comparing House And Senate Versions
- Cramer’s Outrage: Principal Financial Group
- Lightning Round OT: Goldman Sachs, Carnival and More
- A Sector Geithner Can’t Touch?
- Mary Schapiro’s To-Do List
- Cramer Finds Good in Geithner Plan
- Your First Move For Wednesday February 11th
- Web Extra: Fast & Furious Trades For Wednesday
- Rising Star Stock – Monday February 9th
- Range Roving with Jon Najarian
Text Size 
Bank of Montreal will buy the Canadian life insurance business of U.S. insurer American International Group for about C$375 million ($305 million), the companies said on Tuesday. AIG is selling assets to raise funds to repay U.S. government loans.
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 [BMO
Loading...
()
], Canada's fourth-largest bank by assets, said the transaction will have minimal impact on its capital base and is expected to boost its earnings within one year.
BMO said it will take on AIG Life of Canada's 300 employees and 400,000 customers.
The AIG [AIG
Loading...
()
] unit sells its services through 5,000 agents across Canada, direct-to-consumer marketing and traditional employee benefit plans.
Integration into BMO's insurance operations will take place over the next six to 12 months, the bank said. Final deal terms will reflect any change in AIG Life of Canada's value at the closing, which is expected by June 1.
 |
The sale is subject to regulatory approvals. The new company will be called BMO Life Insurance. Since September, AIG has received $152 billion in U.S. government bailout financing. It is scrambling to raise cash through asset sales.
On Monday Reuters reported the company had received a first round of bids for its aircraft leasing unit and was expected to begin shopping its asset management business soon.
BMO and other Canadian banks recently said the time was not right to rush into large acquisitions in the United States or abroad, despite the relative bargains produced by the global economic downturn.
At an investor conference last week, BMO Financial Group Chief Executive Bill Downe said that taking on another bank's loan book and having to work it out was not an attractive proposition.
"We've been very cautious in the last 18 months with respect to making acquisitions in the U.S. and I still think it's early ... I think you can be quite patient," Downe said.
Print
Email
Data is a real-time snapshot *Data is delayed at least 15 minutes