AIG CEO Rebuffs Idea of Breaking Up Company
November 03 2015 - 9:27AM
Dow Jones News
By Leslie Scism
American International Group Inc. Chief Executive Peter Hancock
said management and the board have "carefully reviewed" the idea of
breaking up the insurer on many occasions and concluded that such a
move "did not make financial sense."
Mr. Hancock's comments, made in a conference call with analysts
and investors Tuesday, were his first since activist investor Carl
Icahn last week sent a letter urging the company to split into
three pieces. Mr. Icahn has argued that splitting apart would
reduce the company's regulatory burden.
On Tuesday, Mr. Hancock said that assumption wasn't true.
The "assumed outcome" under Mr. Icahn's proposal is the ability
to return more capital to shareholders, but ratings firms like the
stability and diversification of a combined company, Mr. Hancock
said. Due to ratings-agency concerns, smaller companies would
likely return "less capital, not more," he said.
Mr. Hancock said AIG sees a "tremendous benefit" in having a
combined life and property-casualty operation, and that a split
would be a "distraction" from the company's cost-cutting
initiatives.
He said AIG's management would meet with Mr. Icahn to share its
conclusions.
Write to Leslie Scism at leslie.scism@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 03, 2015 09:12 ET (14:12 GMT)
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