By Francesco Guerrera in New York
Published: March 1 2009 18:10 | Last updated: March 1 2009 23:34
AIG will on Monday announce a radical plan to break itself up after 90 years as a global insurance conglomerate by ceding control of its two largest divisions to the US government in exchange for a $30bn-plus lifeline.
The move, aimed at helping the stricken insurer absorb the blow of huge losses, is the third time in five months AIG has been bailed out by the authorities. Coming shortly after the third government rescue of Citigroup, the decision to save AIG could fuel mounting public anger.
The latest plan, approved by AIG’s board on Sunday, spells the end of any lingering hopes the company could survive as a standalone insurance group.
At the end of the restructuring, AIG will remain as a holding company but its main task would be to sell off or list businesses such as its US personal lines insurer, an aircraft leasing company and its global general insurance unit, and could eventually be wound down.
This is HUGE news. First Citigroup and now AIG. Who's next?
EDIT: Their stock is at 0.42. Yes, forty-two cents.