AIG Fund Buys 25% of Indian Coffee Co.

November 8, 2002

AIG may not qualify as an international conglomerate quite yet, but if it continues the way it’s going some day it just might. A report from Bangalore, India notes that a $750 million private equity fund run by AIG has invested $15 million and taken a 25 percent interest in Amalgamated Bean Coffee Trading Co. Ltd., India’s largest coffee company.

The report by Josey Puliyenthuruthel published on the Internet at Deal.com indicates that ABCL had $45 million in revenues at the close of its fiscal year last March. It operates “roast and grind” coffee outlets, vending machines and a coffee-deli chain, as well as exporting coffee, and has a number of expansion plans that require additional capitalization.

Although no one from AIG has yet commented on the deal, the article indicated that two AIG representatives would join ABCL’s Board of Directors. AIG funds also have investments in other companies and projects on the subcontinent, including BPL Mobile, a cellular telephone provider.

For a company the size of AIG such investments aren’t terribly significant, but they are an indication that the world’s biggest commercial insurer is looking at opportunities outside the insurance industry, that could eventually cushion AIG from the cyclical vicissitudes the industry historically experiences.

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