UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2011
AMERICAN INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
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| Delaware
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1-8787
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13-2592361 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
180 Maiden Lane
New York, New York 10038
(Address of principal executive offices)
Registrant’s telephone number, including area code: (212) 770-7000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions ( see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Section 1 — Registrant’s Business and Operations
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| Item 1.01. |
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Entry into a Material Definitive Agreement. |
On March 1, 2011, American International Group, Inc. (“AIG”) entered into a Coordination Agreement,
dated as of March 1, 2011 (the “Coordination Agreement”), among ALICO Holdings LLC (“ALICO
SPV”), AIG and MetLife, Inc. (“MetLife”) regarding a series of integrated transactions (the
“Disposition”) whereby MetLife has agreed to allow AIG to offer for sale the MetLife securities
that AIG received when it sold American Life Insurance Company (“ALICO”) to MetLife (the “ALICO
Sale”) pursuant to the Stock Purchase Agreement, dated as of March 7, 2010 (the “Stock Purchase
Agreement”), among ALICO SPV, AIG and MetLife, earlier than contemplated under the original terms
of the ALICO Sale. The Disposition will include (i) the sale of MetLife common stock, par value
$0.01 per share (the “Common Stock”), and the sale of Common Equity Units of MetLife (the “Equity
Units”) pursuant to two separate underwritten public offerings (the “Offerings”) upon the terms and
conditions set forth in prospectus supplements (collectively, the “Prospectuses”),
relating to the Common Stock and Equity Units, filed by MetLife with the Securities and Exchange
Commission, and (ii) the sale by ALICO SPV of MetLife Series B Contingent
Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock (the “Interim Preferred
Stock”) to MetLife (the “Repurchase”).
On March 2, 2011, underwriting agreements for the Offerings were signed, pursuant to which AIG
and ALICO SPV have agreed to sell 78,239,712 shares of Common Stock for proceeds to ALICO SPV of
approximately $3.367 billion, before expenses, and 40,000,000 Equity Units for proceeds to ALICO SPV of
approximately $3.299 billion, before expenses. Concurrently with the Offerings, MetLife agreed to the sale of
Common Stock in its primary offering that will enable MetLife to complete the Repurchase of all
shares of Interim Preferred Stock held by ALICO SPV for proceeds to ALICO SPV of approximately $2.950 billion,
before expenses. The Offerings and the Repurchase will close concurrently on March 8, 2011, in
each case subject to the satisfaction or waiver of all conditions to closing. Upon such closing,
aggregate proceeds to ALICO SPV, before expenses, from the Disposition will be approximately $9.616 billion (including $3.0 billion to be placed
in escrow as substitute collateral as described below).
In the ALICO Sale, ALICO SPV received total consideration of approximately $16.2 billion,
comprising net cash consideration of $7.2 billion, 78,239,712 shares of Common Stock, 6,857,000
shares of Interim Preferred Stock convertible into 68,570,000 shares of Common Stock upon the
approval of MetLife shareholders, and 40,000,000 Equity Units with an aggregate stated value of
$3.0 billion. For a complete description of the ALICO Sale and the Equity Units, please see AIG’s
Current Report on Form 8-K/A filed November 5, 2010.
Under the terms of the Investor Rights Agreement, dated as of November 1, 2010 (the “Investor
Rights Agreement”), among AIG, ALICO SPV and MetLife entered into at the time of the ALICO Sale,
sales of MetLife securities by ALICO SPV were prohibited for 270 days from the closing of the ALICO
Sale. Furthermore, the sale of MetLife securities where the proceeds from such sale would exceed $4
billion in any one offering and $6.6 billion in any 180-day period was prohibited.
The Equity Units have been held
in escrow as collateral to secure payments in respect of
indemnity obligations owed by ALICO SPV to MetLife under the Stock Purchase Agreement. Pursuant to
the Stock Purchase Agreement, the escrow collateral would be released to ALICO SPV over a 30-month
period, to the extent not used to make indemnity payments or to secure pending indemnity claims
submitted by MetLife. The escrow collateral is governed by the Indemnification Collateral Account
Security and Control Agreement, dated as of November 1, 2010 (the “Indemnification Control
Agreement” and, together with the Stock Purchase Agreement and the Investor Rights Agreement, the
“ALICO Transaction Documents”), among MetLife, ALICO SPV, AIG and Deutsche Bank Trust Company
Americas, entered into at the time of the ALICO Sale. Pursuant to the Coordination Agreement, the
parties will enter into an Amended and Restated Indemnification Collateral Account Security and
Control Agreement, the form of which is attached as Exhibit C to the Coordination Agreement,
prior to the closing of the Offerings and the Repurchase.
In connection with the Disposition, on March 1, 2011, AIG and ALICO SPV also entered into a letter
agreement (the “Letter Agreement”) with the United States Department of the Treasury (the
“Department of the Treasury”) pursuant to which they received the consent of the Department of the
Treasury to the Disposition. As holder of the outstanding preferred interests in ALICO SPV and in AIA
Aurora LLC (“AIA SPV”), the special purpose vehicle that holds AIG’s remaining shares in AIA Group
Limited, the Department of the Treasury must consent to certain significant actions taken by ALICO
SPV or AIA SPV, including the Disposition. These arrangements are part of the recapitalization of
AIG described in more detail in AIG’s Current Report on Form 8-K filed January 14, 2011. The net
proceeds of the Disposition
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(in excess of $3.0 billion to be placed in escrow as
substitute collateral as described below) will be used to repay the remaining liquidation preference of the Department of the
Treasury’s preferred interests in ALICO SPV and then to partially repay the liquidation preference
of its preferred interests in AIA SPV.
The Coordination Agreement was entered into with MetLife to effect the Repurchase and to amend or
waive certain provisions of the ALICO Transaction Documents in order to permit the Repurchase and
the Offerings and to revise current arrangements with respect to the escrow. Set forth below is a
summary of certain provisions contained in the Coordination Agreement:
The Repurchase
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From the Repurchase, assuming the sale of all of the Common Stock to be sold by MetLife
concurrently with the Offerings, ALICO SPV will receive net proceeds
of approximately $2.950 billion, before expenses. |
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The consummation of the Repurchase is conditioned upon the closing of the concurrent
primary offering of Common Stock by MetLife and other customary closing conditions. |
Amendments to the Investor Rights Agreement
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The parties agree to waive certain provisions of the Investor Rights Agreement to the
extent necessary to permit the Offerings. |
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Any unsold MetLife securities will remain subject to the Investor Rights Agreement. The
sale or transfer of any unsold securities will be prohibited until November 1, 2011.
If the Offerings and Repurchase are completed upon the terms
described above, ALICO SPV will hold no MetLife
securities following the closing. |
Amendments to the Escrow and Collateral Arrangements
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Any cash proceeds from the offering of the Equity Units exceeding the aggregate stated
value of the Equity Units offered will be released to ALICO SPV and an amount of cash equal
to the aggregate stated value of the Equity Units offered will be placed in escrow as
substitute collateral to secure payments, if any, in respect of indemnity obligations owed
by ALICO SPV to MetLife under the Stock Purchase Agreement.
ALICO SPV will use the net amount of any such excess to repay the remaining liquidation preference
of the Department of the Treasury’s preferred interests in ALICO SPV and then to partially repay
the liquidation preference of its preferred interests in AIA SPV. If the Offerings are completed
upon the terms agreed, $3.0 billion will be placed in escrow as substitute collateral, and
approximately $299 million will be released to ALICO SPV. |
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To the extent that indemnity payments are due under the Stock Purchase Agreement, such
payments will be made, first, in cash, or permitted investments of cash collateral
liquidated into cash, from the escrow and, second, in any remaining
Equity Units held in escrow. If the Offerings and Repurchase are
completed upon the terms described above, no Equity Units will remain
in escrow. |
The
Coordination Agreement will terminate on or after March 18, 2011 at the election of any party thereto
if the Offerings and the Repurchase have not closed prior to that date, unless extended by all
parties.
The foregoing description is qualified in its entirety by reference to the full
text of the Coordination Agreement, including the exhibits thereto, and the Letter Agreement, which
are attached hereto as Exhibit 2.1 and Exhibit 2.2, respectively, and which are incorporated into
this Item 1.01 by reference.
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