UAE: American International Group (AIG) is to sell its private banking unit, AIG Private Bank, to Aabar Investments for US$254 million, which also includes the assumption of up to US$83 million of loans. Aabar said the closing price is subject to adjustment and that the bank will change its name and become an independent financial institution. It will be based in Switzerland, with branches and offices in Dubai, Hong Kong, Shanghai and Singapore.
UBS Investment Bank and law firm Lenz & Staehelin advised AIG on the transaction while Abu Dhabi-based Aabar was advised by Goldman Sachs International and law firms Clifford Chance and Baer & Karrer. AIG Private Bank CEO Eduardo Leemann said the buyout sends a clear message to its customers that the bank continues to be trustworthy, reliable and competent.
In September, AIG obtained a US$85 million credit line from the US government to avoid collapsing due to bad mortgage bets. The size of the rescue package increased to US$152 billion in November. AIG is trying to sell assets to repay some of the federal debts but plans to keep its US property casualty and its foreign general insurance businesses, as well as maintaining an ownership stake in its foreign life insurance operations.