AIG To Sell United Guaranty To Arch Capital Group For $3.4 Bln

(RTTNews) - American International Group Inc. (AIG) Monday said it agreed to sell its 100 percent interest in United Guaranty Corporation to Arch Capital Group Ltd. (ACGL).

The total consideration of the deal is $3.4 billion, which comprises of $2.2 billion in cash and about $1.2 billion in newly issued Arch stock.

Arch Capital Group is Bermuda-based writer of specialty lines of property and casualty insurance and reinsurance, as well as mortgage insurance and reinsurance, on a worldwide basis.

AIG will retain all mortgage insurance business ceded under an existing 50% quota share agreement between UGC and AIG subsidiaries for business originated from 2014 through 2016.

"Today we have reached an important milestone in a strategy we committed to in March 2015, when I stated in my first shareholder letter as AIG CEO that we would 'sculpt the future AIG' into a more focused company and that selective divestitures would be an important part of reaching that goal," said Peter Hancock, President and Chief Executive Officer of AIG.

Closing of the deal is subject to required regulatory approvals.

Greensboro, North Carolina-based United Guaranty is a private mortgage insurance company in the US with $186.4 billion of first-lien primary mortgage insurance in force as of June 30, 2016.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC served as financial advisors to AIG, and Sullivan & Cromwell LLP served as legal advisor to AIG on the transaction.