The insurance giant American International Group said on Thursday that it planned to sell a $2 billion stake in its Asian insurance unit as it seeks to repurchase $5 billion of its own stock from the United States government.
The move is the latest effort by A.I.G. to shed assets and repay the government after the insurance firm received a $182 billion bailout in 2008.
A.I.G. has been progressively selling down its stake in its Asian insurance business, A.I.A., since listing the company on the Hong Kong stock exchange in an initial public offering that raised $17.8 billion.
Under the terms of the deal announced on Thursday, A.I.G. will offer investors 600 million shares in A.I.A. at 25.75 Hong Kong dollars to 26.75 Hong Kong dollars, according to the term sheet obtained by DealBook.
The price range represents between a 2.1 percent discount to a 1.7 percent premium on the Asian insurer's closing price on Thursday. The deal will leave the insurer with around a 13 percent stake in A.I.A.
Earlier this year, the insurance company also sold a $6 billion stake in its Asian unit, which is the region's third-largest insurer.
The American company said on Thursday that it would buy as much as $5 billion of its own stock, the firm's third repurchase of its shares so far this year. A.I.G. added that it would use the proceeds of the A.I.A. share sale, in part, to repurchase the shares.
The Treasury Department also has been selling its stake in the insurance giant. Last month, officials said they would sell around $5 billion worth of A.I.G. stock to reduce the government's holding in the firm to around 53 percent, from 92 percent when the insurer was first bailed out.
The government's links with A.I.G. now lie primarily with the Treasury Department's shares in the insurer. The holdings could prove profitable. The stock is currently trading at almost $35, ahead of the government's break-even price of $29.
Since receiving a government bailout, the insurer has recovered by re-inventing itself as a smaller company that largely shies away from the complex investments that nearly led to its downfall.
Goldman Sachs and Deutsche Bank are managing the $2 billion share sale for A.I.G.
