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Shares in insurance giant AIG were up this week on the New York Stock Exchange, following the news that it has agreed to sell its Alico foreign life and health insurance to US rival MetLife for $15.5bn (£10.3bn).

Last week, AIG sealed a deal to sell its Asian life business to Prudential. The insurer is raising money to repay the US government, which stepped in to save it from collapse in September 2008. The Metlife deal will see AIG walk away with $6.8bn in cash, with the remaining $8.7bn made up of shares and options. AIG will have a 20% stake in MetLife, making it the company’s second-biggest shareholder. Following the announcement of the deal, Moody's affirmed Alico’s A1 insurance financial strength rating and changed the outlook to stable from developing.

The transaction is scheduled to close in the fourth quarter of 2010, subject to regulatory and other approvals.