AIG spin off: how will the Corebridge IPO impact AIG shares?

AIG has spun off its life and retirement business via an IPO raising $1.68 billion. Find out everything we know about AIG’s spin off.

AIG spin off

American International Group has demerged its life and retirement business - a plan that's been in the work for about two years now - via what’s known as a ‘carve out’. This is what happens when a company lists shares of a unit on public markets.

Learn about the difference between spin offs, split offs and carve outs.

Usually, a carve out is a step along the road to becoming a standalone company, which is what AIG plans for its retirement service after it’s listed. The parent company of the life and retirement business – currently called SAFG Retirement Services – will be rebranded as Corebridge Financial.

Corebridge was listed in the biggest initial public offering of 2022 - at the time - selling 80 million shares at $21 each. It raised over $1.68 billion and values the new company at $13.6 billion.

As part of the spin off plan, AIG also sold a stake in its life and retirement unit to Blackstone, which now controls around $90 billion of assets that will sit within the Corebridge portfolio – and a further $60 billion within AIG’s core business. Blackstone paid $2.2 billion for its 9.9% stake.

Learn more about what an IPO is.

Why is AIG splitting up?

AIG is separating its life and retirement business in an attempt to streamline the insurance firm’s sizeable portfolio. The company has been going through a strategic restructuring for a while, as it planned to split into three separate entities to better manage operations: a property-casualty unit, a life and retirement unit and a mortgage offering.

In 2017, AIG sold its mortgage unit to Arch Capital for $3.4 billion, so the spin off of the life and retirement business is the next step in this clean up.

Other upcoming spin offs include:

What happens to AIG stock when the company splits?

AIG shares will continue to trade on the New York Stock Exchange as normal. Shares of AIG rallied after the company originally announced the spin off, as the long-term goal of these corporate restructurings is to create shareholder value.

However, the move could mean a short-term decline in value after the new company takes its assets off AIG’s balance sheet. Research by Macquarie Group suggests that the new entity could underperform for a period of about six months while it finds its footing.

What does the AIG split mean for shareholders?

Unlike in other types of demergers, AIG shareholders will not receive any shares of the new company automatically. So, to get exposure to the Corebridge unit, investors will need to buy stock once it’s listed.

It’s also important to remember that shareholders will be losing the diversity benefit that the broad portfolio of AIG offered. So, investors may need to consider rebalancing their assets.

How to trade AIG and Corebridge shares with City Index

You can speculate on AIG and Corebridge shares with us. All you need to do is:

Open a City Index account, or log in if you’re already a customer
Search for ‘AIG’ in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

Alternatively, you can start share trading risk free by signing up for our demo trading account.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.