Brazilian bank Unibanco (NYSE: UBB) will pay US$820mn for the stake of US insurer AIG (NYSE: AIG) in their joint venture formerly known as Unibanco AIG, the companies said in separate statements.
As part of the arrangement, AIG will buy out Unibanco's shares in another of its Brazilian insurance holdings, AIG Brasil Companhia de Seguros, for US$15mn, one of the joint statements said.
Unibanco comes away as full owner of insurance company Unibanco Seguros, life and pension firm Unibanco Vida e Previdência and health insurer Unibanco Saúde Seguradora, all of which formerly had AIG in their trade names.
The firms will continue to work together in large risks and reinsurance, the statement said.
"This [deal] allows AIG to establish an independent presence in the Brazilian insurance market and at the same time keep a good business relationship with Unibanco Seguros," AIG Latin America head, Hamilton da Silva, said in the statement.
AIG affiliate American Home Assurance Company was approved as an admitted reinsurer in October by regulator Susep, at which time da Silva told BNamericas the company had plans of 100mn reais (US$44.3mn) in premiums in the first 2-3 years of operations.
In the first nine months, Unibanco had total premiums and pension contributions of 3.79bn reais for 7.62% of the Brazilian market, base on calculations using the latest Susep figures.
Questions remain on what Unibanco's planned merger partner, Itaú (NYSE: ITU), will do with its joint venture with Bermuda-based XL Capital (NYSE: XL) as the Brazilian banks move to consolidate their insurance and pension operations.
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