AIG Selling Part of Stake in Reinsurer Transatlantic Via Secondary Offering

May 28, 2009

American International Group Inc. said Thursday it will sell a part of its 59 percent stake in reinsurer Transatlantic Holdings Inc. to the public in a secondary offering, marking its latest divestiture.

AIG, which is trying to pay back the U.S. government after a massive bailout, had initially expected it would be able to sell its Transatlantic stake relatively quickly.

But it has had to redraw its divestiture plans due to the difficulty of selling units amid the financial crisis and opted to look at public offerings instead of outright sales of other businesses as well.

AIG owns about 39.1 million shares of Transatlantic. After the offering, its holdings will reduce to about 19.7 percent of the outstanding shares, or 13.9 percent if the underwriters option is fully exercised.

It said it had filed a preliminary prospectus supplement with the U.S. Securities and Exchange Commission for the proposed public offering of 26 million Transatlantic shares.

Transatlantic will not sell any shares in the offering.

(Reporting by Paritosh Bansal, editing by Dave Zimmerman)

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