Blackstone Enters Deal to Manage AIG Life and Retirement Money Among Other Deals

Posted on 07/16/2021


American International Group, Inc. (NYSE: AIG) and Blackstone Group (NYSE: BX) announced that they have reached a definitive agreement for Blackstone to acquire a 9.9% equity stake in AIG’s Life & Retirement business for US$ 2.2 billion in an all cash transaction.

As part of this agreement, AIG also agreed to enter into a long-term strategic asset management relationship with Blackstone to manage an initial US$ 50 billion of Life & Retirement’s existing investment portfolio upon closing of the equity investment, with that amount increasing to US$ 92.5 billion over the next six years.

Upon the closing of these transactions, which are expected to occur simultaneously by the end of the third quarter of 2021, Jon Gray, President and Chief Operating Officer of Blackstone, will join the Life & Retirement Board of Directors. These transactions are subject to HSR approval and other customary closing conditions.

Blackstone Real Estate Income Trust Deal
Separately, AIG and Blackstone Real Estate Income Trust (BREIT), a long-term, perpetual capital vehicle affiliated with Blackstone, also announced that they have reached a definitive agreement for BREIT to acquire AIG’s interests in a U.S. affordable housing portfolio for approximately US$ 5.1 billion, in an all cash transaction. This transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021.

AIG has stewarded the Affordable Housing portfolio for more than 30 years. The assets are longer core to AIG’s long-term investment strategy.

Advisors
AIG’s financial advisors with respect to the Life & Retirement transactions are Evercore and J.P. Morgan Securities LLC, and its legal advisors are Wachtell, Rosen, Lipton & Katz and Debevoise & Plimpton LLP. With respect to the sale of the Affordable Housing portfolio, CBRE Capital Advisors, Inc. acted as AIG’s financial advisor, and its legal advisors are Sullivan & Cromwell LLP, Nixon Peabody LLP and Elkins Kalt Weintraub Reuben Gartside, LLP.

On the Life & Retirement transactions, Goldman Sachs served as financial advisor, and Simpson Thacher and Bartlett LLP and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Blackstone. With respect to the Affordable Housing portfolio transaction, Blackstone’s financial advisors were Eastdil Secured, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC and legal advisors were Simpson Thacher & Bartlett LLP and Jones Day.

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