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CHARLOTTE, N.C. – Embattled insurer American International Group Inc. said Monday it is selling its Japanese headquarters to Nippon Life Insurance Co. for $1.2 billion in cash.
The transaction, which is among the biggest divestitures New York-based AIG has made to reimburse the U.S. government for its massive infusion of aid, is expected to close in the second quarter.
The 35-year-old building is 15 stories and sits on prime real estate in central Tokyo, next to the Imperial Palace. The property consists of about one acre of land, the company said.
AIG's roots in Japan extend back to 1946, and the company is now the country's biggest foreign casualty insurer.
"AIG is pleased to effectively monetize this asset within the context of its restructuring effort," AIG Chief Executive Ed Liddy said in a statement. Media reports last week discussed the possible sale of the building for around $1 billion.
Separately, an internal memo with the subject line "Seize the Future" cited by The Wall Street Journal noted AIG's turnaround may take some time.
In a memo dated April 23, an initiative code-named "Project Destiny" involved a 45-day review of the New York-based insurer's businesses that's supposed to lead to a multiyear restructuring plan, the report said.
AIG has received $182.5 billion in financial support from the government since September.
A large part of the memo, sent to employees by e-mail from Liddy, consisted of an update on the project by AIG Chief Restructuring Officer Paula Reynolds, according to the paper.
The project may be discussed at a Congressional hearing about AIG, scheduled for Wednesday, the report said.
AIG spokesman Mark Herr said the company regularly posts "Seize the Future" memos to employees, and a recent memo did discuss restructuring efforts by the company.
In an e-mail to The Associated Press, Herr noted, that in December Liddy said: "The U.S. government has put a five-year timeframe on our arrangements. Thus, we don't need to hold a 'fire sale.' So we are committed to identifying buyers that will honor our values and recognize the contributions of our people."
The U.S. government provided AIG with an $85 billion loan in September. As market conditions worsened and losses piled up at the insurer, the government revised and expanded its loan package to AIG several times. The package of loans now totals nearly $180 billion after being expanded in March when AIG reported a fourth-quarter loss of $61.7 billion, the largest ever quarterly corporate loss in U.S. history.
During the first quarter, AIG said it lost $4.35 billion, or $1.98 per share, compared with $7.81 billion, or $3.09 per share, during the same quarter last year.
As part of the loan package, the government has also taken a roughly 80 percent stake in the insurance giant.
Since its initial cash infusion, AIG has been working toward repaying part of the government loan by selling off business units. The company has said it plans to plans to retain its U.S. property and casualty and foreign general insurance businesses, and a stake in its foreign life insurance operations.
Last month AIG sold its car insurance unit, 21st Century Insurance, to Zurich Financial Services Group for $1.9 billion. The transaction is the largest divestiture by AIG since September, and one of 11 asset sale agreements it has reached the past few months.
Recent media reports have also said AIG may also be nearing a deal to unload its airplane leasing business, International Lease Finance Corp.
In March, AIG said it would spin off AIU Holdings, its property and casualty insurance business, and give the company its own board of directors, management team and brand distinct from that of the embattled company, which has also been embroiled in controversy surrounding bonuses paid to employees. In April, AIG transferred AIU Holdings to what's known as a special purpose vehicle in preparation for the potential sale of part of the business.
Shares of AIG fell 11 cents, or 5.5 percent, to close at $1.90 Monday.
