AIG to sell 20% stake in Corebridge to Japan's Nippon Life for $3.8 billion

(Reuters) -U.S. insurer American International Group said on Thursday it would sell a 20% stake in Corebridge Financial to Japan's Nippon Life Insurance for $3.8 billion.

The deal is part of AIG's efforts to reduce its holdings in the life and retirement business, which it had listed as a separate company in 2022 following years of pressure from activist investors.

AIG will sell 120 million shares at an average price of $31.47 each. It did not specify what the proceeds from the sale would be used for, but has previously said they could be used for stock buybacks.

The insurer had a nearly 53% stake in Corebridge before the latest deal, according to regulatory filings. Peter Zaffino, CEO at AIG, has committed to sell the company's remaining ownership in Corebridge, but the firm agreed to maintain a 9.9% stake for two years after the deal closes.

Corebridge shares surged 13% to a record high, while AIG's stock climbed 1.3%.

The sale would help Nippon Life boost its presence in the U.S. market. With 15 million clients, the company is one of the biggest life insurers in Japan, and also operates in Australia, India, Myanmar, China, Thailand and Indonesia.

J.P. Morgan Securities advised AIG on the deal, which is expected to close by the first quarter of 2025.

(Reporting by Niket Nishant in Bengaluru; Editing by Shilpi Majumdar and Krishna Chandra Eluri)