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BREAKING NEWS FROM CNBC'S MARY THOMPSON ON AIG's PLAN TO EXIT GOVERNMENT OWNERSHIP

WHEN: Today, September 30th

WHERE: CNBC's"Squawk Box"

Following is the unofficial transcript of CNBC's Mary Thompson's breaking news on AIG's plan to exit government ownership today on "Squawk Box." All references must be sourced to CNBC.

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MARY THOMPSON: I'M AT ONE OF THE AIG BUILDINGS ON 70 PINE STREET IN DOWNTOWN MANHATTAN. I JUST HAD AN OFF CAMERA INTERVIEW WITH THE COMPANY'S CEO, BOB BENMOSCHE. I WANT TO BRING YOU VIEWERS A COUPLE THINGS HE SAID. HE BASICALLY SAID IT'S NOT A GOOD DAY NOT ONLY FOR THE COMPANY, ITSELF, AND ITS EMPLOYEES BUT ALSO FOR TAXPAYERS.HE FEELS THE GOVERNMENT IS GOING TO BE MAKING A PROFIT OFF OF THEIR INVESTMENT IN AIG. HE SAID AT THIS POINT RIGHT NOW THE COMPANY IS SMALLER, MORE FOCUSED, AND THAT IT'S A FRANCHISE THAT IS POISED TO GROW. HE ALSO BELIEVES THEY HAVE AN INVESTABLE PROPOSITION. HE SAID YOU'RE GOING TO SEE EVIDENCE OF THIS WHEN INVESTORS GET A CHANCE TO LOOK OVER THE PLAN AND THE STOCK PRICE RESPONDS ONCE THE MARKET OPENS TODAY. AS FAR AS HIS FUTURE GOES, HE SAYS THERE IS A FEELING THAT HE SHOULD STAY HERE FOR A COUPLE OF YEARS. HE WOULD LIKE TO STAY UNTIL THE LAST SHARE OF THE GOVERNMENT STAKE IS SOLD. HE SAID ONE OTHER THING HE WOULD LIKE TO DO DURING THE REST OF HIS TIME HERE IS WHAT HE CALLED, HE'D LIKE TO DO A NICE ACQUISITION, ONE THAT SAYS AIG IS BACK AND IT'S BACK TO ITS OLD STRENGTH. CERTAINLY NOT AS LARGE AS IT USED TO BE, BUT AN ACQUISITION THAT WOULD TELL THE INVESTMENT COMMUNITY THAT AIG IS ONCE AGAIN A STRONG COMPANY. HE SAID THE KEY RIGHT NOW AS FAR AS ITS EMPLOYERS GO IS TO MAKE SURE THAT THEY ARE PAYING COMPETITIVELY GOING FORWARD. ONCE IT REPAYS THE T.A.R.P. MONEY IT'S NO LONGER UNDER THE GUIDANCE OF THE OFFICE OF THE SPECIAL MASTER. AND HE SAYS HE REALLY DOESN'T BELIEVE THEY'VE HAD PROBLEM HIRING EXECUTIVES OR RETAINING TALENT. ADDITIONALLY HE SAYS THAT THE PLAN TO REPAY THE GOVERNMENT IS A HUGE RELEASE, AND AS FAR AS THE CUSTOMERS GO, AND THIS IS KEY FOR AIG, THIS PROVIDES THEM WITH ANOTHER REASON TO STAY WITH THE COMPANY. HE SAYS A NUMBER OF THEM ASK, WHEN IS THIS CLOUD GOING TO BE REMOVED, CAN WE BE ASSURED AIG WILL BE HERE THE NEXT DAY IN HE SAID THIS IS A MESSAGE TO OUR CLIENTS AS WELL AS EMPLOYEES THAT AIG AS WE WAKE UP TODAY WILL BE HERE YEARS FROM NOW.JOE?

KERNEN: OKAY, MARY, IT HAS A LOT OF RAMIFICATIONS, DOESN'T IT?WE ALL WANT THIS TO HAPPEN, BUT I WAS JUST THINKING THAT WE WILL NEVER THINK ABOUT AIG WITHOUT THINKING ABOUT THE COUNTERPARTIES THAT GOT 100 CENTS ON THE DOLLAR.NO MATTER HOW GOOD THIS TURNS OUT IN TERMS OF US GETTING PAID OFF, IT'S GOING TO BE DEFINED BY THAT -- ALMOST THAT CONDUIT TO THE BIG INVESTMENT BANKS THAT DIDN'T REALLY SUFFER AS MUCH AS THE REST BECAUSE AIG MADE THEM ALL WHOLE WITH THE GOVERNMENT'S MONEY.

THOMPSON: WELL, I'M SURE THAT, YOU KNOW, THAT WILL BE SOMETHING THAT PEOPLE DO REMEMBER. I THINK CERTAINLY THE FEELING ISERE TODAY AND THE, YOU KNOW, AT AIG, IS THAT THEY WANT TO FOCUS ON WHAT'S AHEAD AS OPPOSED TO WHAT'S PASSED. AS YOU SAID, THERE'S ALWAYS GOING TO BE A PARAGRAPH IN THERE SOMEWHERE THAT IT WAS ONE OF THE LARGEST RECIPIENTS OR WAS ONE OF THE LARGEST RECIPIENTS OF GOVERNMENT AID. THE FOCUS IS ON WHAT IT CAN DO FOR SHAREHOLDERS AND EMPLOYEES AND THE GOVERNMENT BEING A LARGE SHAREHOLDER GOING FORWARD.

SORKIN: IF IT ACTUALLY WORKS, IF TWO OR THREE YEARS FROM NOW WE GET THE MONEY BACK, RIGHT, AND WE GET IT BACK WITH A PROFIT, WE MAY NEVER GET IT BACK WITH ENOUGH OF A PROFIT IN TERMS OF THE RISK WE TOOK ON.IF WE GET IT BACK, CAN WE NOT SAY MISSION ACCOMPLISHED?

KERNEN: I'M NOT SAYING GEITHNER DID THE WRONG THING BY SAYING, LOOK,THERE ARE CONTRACTUAL OBLIGATIONS TO THESE COUNTERPARTIES AND THIS IS THE WAY WE HAD TO DO IT. I'M SAYING THE WHOLE GOLDMAN SACHS SQUID ON THE FACE OF CAPITALISM DEPENDS ON THAT HAVING BEEN A BAD MOVE BY REGULATORS.

SORKIN: DOES THE SQUID COME OFF?

THOMPSON: THE QUESTION, TOO, IS THAT A LEGACY ASSOCIATED MORE WITH GOLDMAN SACHS OR AIG?

KERNEN: GOLDMAN AND SOME OF THE OTHERS.YOU'RE RIGHT.IT ALMOST STICKS MORE TO GOLDMAN THAN IT DOES -- GOLDMAN AND GEITHNER.GEITHNER OF COURSE WORKED AT GOLDMAN

THOMPSON: DESPERATE TIMES FOR AIG -- YOU CAN QUESTION THEIR ACTIONS AND THEY'RE GOING TO BE QUESTIONED FOR YEARS.AT THAT TIME IT WAS LET'S GET THIS DONE AS SOON AS POSSIBLE SO WE CAN BRING IN A RESCUE PLAN. I DON'T THINK THAT'S SOMETHING THAT WOULD STICK WITH AIG, AS MUCH AS IT WOULD GOLDMAN WHO REFUSED TO TAKE ANY LESS THAN 100 CENTS ON THE DOLLAR.

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