AIG will conduct an IPO of its life insurance and asset management unit Corebridge, which will be valued at up to $15.5 billion.
The IPO of Corebridge - the life insurance and asset management business of US insurance giant AIG - is seen as a test of investor confidence under the financing winter.
1. Background of Corebridge and Its Parent Company
AIG is an international, multinational insurance and financial services company.
According to the National Association of Insurance Commissioners,
AIG ranked 13th in premium revenue for life insurance, annuities and related products sold in the US last year and 12th in property and casualty premium revenue for the same period.
Corebridge is recognized as a leading enterprise software publisher for Communications Enabled Business Processes (CEBP)
Corebridge also reported achieving revenue of $16 billion and net income of $6 billion in the first half of 2022. The company was scheduled to go public earlier this year, but was delayed due to "high stock market volatility" in May and June.
2. IPO Details
Shares Outstanding and Price: The company plans to raise $1.7 billion to $1.9 billion by offering 80 million shares of Corebridge at $21 to $24 each, according to a statement Tuesday.
Date: The company will go public on the New York Stock Exchange later this month.
Ownership: According to the SEC files, AIG will control nearly 78% of the company and BlackRock will hold about 10% after the IPO.
Valuation: That price would value the company at between $13.5 billion and $15.5 billion, a reduction of nearly 30% from last year. By comparison, the company was valued at $22.2 billion after receiving an investment from Blackstone Group last November.
3. Significance of This IPO - Much Anticipated
The offering was the first IPO deal in the US after Labor Day, which is often considered a key point to restart the IPO boom.
According to data compiled by PwC, once completed, it will also end the longest IPO "dry season" in more than 20 years.
The US IPO market has been almost completely frozen since the beginning of the year. Corebridge's IPO will be closely watched by bankers and private companies, and is seen as a test of investor appetite.
Corebridge is widely seen by the market as the best choice to reopen the market.
Compared to huge-losses tech groups that have dominated IPO offerings, Corebridge's large size,good profitability and the backing of its parent company will make it a relatively safe bet.
According to media:
This is a well-known company with a stable business. We think the time is right and we are confident.
It would also be the largest IPO of the year for US stocks, surpassing private equity group TPG's $1.1 billion IPO in January.
AIG Chief Executive Peter Zaffino said in his second-quarter results last month that the delay gave the group time to make the business a stand-alone company and then consolidate its capital structure.
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