On Thursday, Morgan Stanley maintained its Equalweight rating on American International Group (NYSE:AIG) with a consistent price target of $82.00. The firm acknowledged AIG's recent decision to sell approximately 122 million shares of its Corebridge Financial Inc. (CRBG) stock to Nippon Life at a rate of $31.47 per share, amounting to nearly $3.8 billion. This move will result in AIG retaining a 9.9% ownership in CRBG for two years following the transaction's close.
The sale to Nippon Life is seen as an innovative approach by AIG, diverging from the anticipated exchange offer or open market operations to decrease its Corebridge stake. This strategic sale of a 20% stake in Corebridge to Nippon Life is viewed as a method to enhance shareholder value, as it addresses potential concerns about significant selling pressure on Corebridge shares. Moreover, it enables AIG to promptly use the proceeds while persisting in its capital management plan.
The transaction is expected to alleviate some of the uncertainties surrounding Corebridge's future. It also provides AIG with the financial flexibility to continue its efforts to diminish its exposure to Corebridge. The agreement with Nippon Life is seen as a positive step for AIG, as it seeks to strategically manage its investments and shareholder interests.
The analysis from Morgan Stanley suggests that the transaction could be beneficial for AIG in the long term. It not only reduces the immediate pressure on Corebridge's share performance but also aligns with AIG's broader strategy to manage and optimize its asset portfolio.
In conclusion, AIG's recent transaction with Nippon Life is regarded as a favorable development by Morgan Stanley, which has chosen to reaffirm its rating and price target for the insurance giant. The deal is anticipated to support AIG's ongoing capital management strategy and reduce uncertainties related to its Corebridge investment.
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