Insurance powerhouse AIG has agreed to sell its businesses in six countries in Central and Eastern Europe (CEE) to Canada’s Fairfax Financial Holdings.
The two companies have entered into several agreements which will see Fairfax acquire renewal rights for the portfolio of local businesses written by AIG’s CEE operations in Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia.
Fairfax will also assume AIG’s CEE operating assets and employees, the insurer said.
As part of the agreements, AIG will also sell to Fairfax its local commercial and consumer insurance operations in Argentina, Chile, Colombia, Uruguay, Venezuela and Turkey.
Fairfax will acquire the European and Latin American businesses for about US$240 million (£195 million) in cash, according to AIG.
The insurance titan said the divestiture is part of a strategic plan to streamline its global operations. AIG is focusing its geographic footprint and investment in major economies that offer the strongest growth potential and opportunity for scale.
“This partnership marks a significant step forward in achieving the strategic priorities of AIG, as well as Fairfax,” said AIG president and CEO Peter Hancock.
The latest deal follows two other major transactions made by AIG in recent months. In September, the insurer sold its Lloyd’s of London platform, Ascot Underwriting, to Canada Pension Plan Investment Board for more than £890 million.
In August, AIG also sold its mortgage-insurance business United Guaranty Corporation to Bermuda-based insurer Arch Capital Group for US$3.4 billion.
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