Expected buyer is a Japanese insurer, says report

(HONG KONG) American International Group Inc is close to agreeing to sell its Japanese headquarters for about US$1 billion, which would mark one of its largest sales of assets to pay off government debt, The Wall Street Journal reported.

At least two suitors competed for the 15-storey building next to the Imperial Palace in Tokyo, the report said, quoting unidentified people familiar with the matter.

The expected buyer is a Japanese insurance company which wasn’t identified in the report.
AIG put the property up for sale in February to help pay off US$45 billion it owes the US government as part of a US$173.3 billion rescue package, the newspaper said.

The exact timing of an agreement was unclear because the Japanese markets will be shut until tomorrow for the Golden Week holidays, it added.

AIG recently shelved plans to sell its core insurance operations, including those in Asia, because of poor market conditions, the report said.

Yet it is continuing its attempts to sell real estate and non-core businesses, such as its aircraft-leasing unit, it added.

Last month, Zurich Financial Services AG agreed to pay US$1.9 billion for AIG’s personal car insurance arm, the largest AIG divestiture so far since its September government bailout, the report said.

AIG may also be close to selling International Lease Finance Corp, its aircraft leasing unit, the report quoted unidentified people as saying.

Several private equity- led groups have indicated interest in the business, whose sale could fetch US$4.5 billion to US$6 billion, it cited people close to the matter as saying.

The US government, which has offered to help finance the sale, is expected to clarify requirements for potential buyers in the coming weeks, according to the report.

Former AIG chief executive officer Maurice ‘Hank’ Greenberg, who led the insurer for nearly 40 years, had warned that the sale of the Tokyo office building would further demoralise the company’s Japanese employees, the The Wall Street Journal said.

AIG arrived in Japan in the wake of World War II upon the invitation of General Douglas MacArthur.
The sale of the property would serve as a reminder of the insurer’s waning influence in Asia, the report said.

Tokyo’s commercial real estate market has held up better than international hubs in recent months, the report added.

Bonnie Wu, an AIG spokeswoman in Hong Kong, referred inquiries to the Tokyo office, where nobody answered calls because of the holiday. – Bloomberg

Source: Busines Times, 5 May 2009