AIG to sell Canadian unit for about $308 million

CHARLOTTE, North Carolina-American International Group Inc., which received a massive cash infusion last year from the U.S. government, said Tuesday it is selling AIG Life Insurance Company of Canada to the parent of the Bank of Montreal for about $308 million in cash.

The deal is part of the New York-based insurance giant's restructuring plans and is expected to close by June 1.

AIG Life of Canada, based in Toronto, sells insurance and retirement savings products, including universal and term life plans, critical illness plans and annuities. The company sells its services through more than 5,000 agents across Canada.

"Acquiring AIG Life of Canada will strengthen BMO's overall financial planning, wealth and retirement offering, giving us the ability to expand our client relationships through a comprehensive line up of products," Bill Downe, president and chief executive of Toronto-based BMO Financial Group said in a statement.

BMO Financial said it will take on AIG Life of Canada's 300 employees and 400,000.

In November, the U.S. government gave AIG a $150 billion rescue package to help the company pull through the credit crisis. That package replaced an earlier loan of $85 billion after it became apparent the insurer needed more funds.

AIG said in October it would sell off a number of business units to repay the original $85 billion government loan.

The company has not specifically disclosed the assets it would sell or the expected prices from the sales. However, AIG has said it plans to retain its U.S. property and casualty and foreign general insurance businesses, and plans to retain an ownership interest in its foreign life insurance operations.

As of Dec. 22, AIG had already sold interests in four businesses, and earlier in the month was said to be in the final stages of selling its U.S. personal lines business.

Shares of AIG rose a penny to $1.55 in morning trading Tuesday, while BMO Financial fell 18 cents to $26.77.