Business Times - 05 Jun 2009
AIG to sell its iconic New York headquarters
(WASHINGTON) New York City was teetering on the brink of bankruptcy in the mid-1970s, and companies were abandoning the crime-ridden metropolis for offices in New Jersey, Connecticut and Long Island.
But a growing insurance company named American International Group (AIG) placed its lot with the city's future and purchased a skyscraper at 70 Pine Street.
Over the next three decades, AIG would grow into a global giant, operating in more than 130 countries, only to crash spectacularly during last autumn's financial crisis. Now, as it struggles to pay back billions in aid from US taxpayers, the company has agreed to sell its iconic New York headquarters, according to people familiar with the deal.
The towering art deco building at 70 Pine Street is one of the city's tallest, rising 66 stories and nearly 1,000 feet above lower Manhattan's financial district. AIG plans to complete the sale of the building and another nearby at 72 Wall Street by summer's end, sources said.
The company confirmed the sale on Wednesday but declined to provide details about the buyer or the selling price. But a person familiar with the deal said that the buyer was a foreign company. Experts have estimated the sale of the headquarters at about US$100 million, far below what it likely would have commanded before layoffs consumed Wall Street and the real estate market collapsed.
'It's kind of the classic New York skyscraper,' said Daniel Abramson, professor of art history at Tufts University and author of Skyscraper Rivals: The AIG Building and the Architecture of Wall Street. He added: 'If there are images of the city that stand for it, the AIG building is one of those.'
The steel-framed skyscraper, clad in masonry, was finished towards the end of a jazz-age building boom that ended during the Great Depression. It was completed in 1932 to house Cities Service Co, later known as Citgo.
It featured a state-of-art design for its time - double- decker elevators, hot-water heating and a sleek lobby of marble and polished steel. A soaring spire topped the structure and glowed high above the city at night. A small observatory enclosed entirely in glass offered breathtaking panoramas of Manhattan.
In 1976, it caught the eye of Maurice 'Hank' Greenberg, AIG's chief executive at the time.
'We were desperate for more space,' he recalled. 'We were growing and growing. We grew into the building quickly. I believed New York City would be the nexus of where to be. It was a tremendous buy. We bought it for US$15 million.'
Mayor Abe Beame held a news conference to thank AIG for its willingness to resist the exodus and remain in the city.
'It's a great symbol. It's too bad,' Mr Greenberg said of the pending sale. 'I don't see the logic in selling your head office building, which is an image around the world, in the midst of a real estate depression. It doesn't make any sense.'
But AIG spokeswoman Christina Pretto said that the sale is right for the company. 'It makes sense from an expense standpoint and from a space standpoint,' she said. -- LAT-WP
Business Times - 03 Jun 2009
AIG cuts asking price for Taiwan unit
TAIPEI - American International Group (AIG) has lowered its asking price for its Taiwan insurance unit to US$1.8-US$2.0 billion, prompting interest from three investors, a local newspaper reported on Wednesday.
AIG had previous sought to sell Nan Shan Life, it's 95 per cent-owned unit, for US$2-US$2.5 billion, the Economic Daily reported, citing unnamed sources.
The lower price has attracted interest from a global private equity firm, Taiwan's Fubon Financial and China Life, the Chinese-language paper said.
An AIG executive is set to visit Asia to talk to the private equity firm because its offered price topped those of the other two, it said.
Officials at the companies could not be reached immediately for comment.
The sale comes as the bailed-out US insurer seeks to raise cash to pay back government debt. AIG confirmed in May it was to speed up plans to list its Asian subsidiary through an IPO that could raise more than US$4 billion.
At mid-day trading, shares of Fubon were down 2.2 per cent while China Life had advanced 5.4 per cent. Taiwan's broader market declined 0.87 per cent. -- REUTERS
Business Times - 03 Jun 2009
AIG asset mgt unit attracts Asia investors
* Temasek, Pacific Century may join bidding group: source
* Reaches deal for NY HQ, Wall St building: source
* AIG to sell Argentina consumer finance ops for US$44m
* Negotiating Colombia, Mex consumer finance sale: source
* Shares off 4.2%
NEW YORK - Singapore's Temasek Holdings Pte Ltd and Hong Kong tycoon Richard Li's Pacific Century Group may join an investor group in talks to buy American International Group Inc's (AIG) asset management unit, a source familiar with the matter said on Tuesday.
Franklin Resources Inc and Crestview Partners LP are in exclusive talks for the business, and the two Asian investors are considering taking part in that consortium, the source said.
The asset management business, which rests with AIG Investments, had drawn interest from both private equity and strategic buyers, sources have said previously. Initial bids for the unit had come in around US$500 million.
AIG also agreed to sell two New York buildings, including its downtown Manhattan headquarters, another source familiar with the matter said.
The insurer's headquarters at 70 Pine Street are in a 66-story building topped with a Gothic-like spire. It was the tallest building in downtown Manhattan prior to the building of the World Trade Centre. Occupants of the office are likely to stay there through the end of 2010.
The other building is located at 72 Wall Street, and employees are to be relocated by the end of this year, the source said.
Both buildings, which are connected by a skywalk, were constructed in 1932 and have been owned and operated by AIG since the 1970s.
The source declined to name the buyer or the value of the deal.
Separately, AIG said it agreed to sell its consumer finance operations in Argentina for nearly US$44 million to Banco Galicia and an investment group led by Grupo Pegasus.
Banco Galicia bought 80 per cent of the company and the Pegasus investment group purchased the remaining 20 per cent.
AIG is also in negotiations to sell its consumer finance businesses in Colombia and Mexico, another source familiar with the matter said.
AIG bought Inversora Pichincha, which was the third-largest consumer finance company in Colombia, from Ecuador-based Banco Pichincha CA and other minority shareholders last year.
AIG declined to comment. Pacific Century and Temasek could not be reached immediately for comment after hours. The sources are anonymous because the talks are private.
The moves are part of a larger divestiture program by AIG, as it looks to sell assets to pay back the US government. The government has committed some US$180 billion to AIG's rescue, including about US$85 billion in loans that the insurer is trying to repay with these divestitures.