Insurance giant American International Group announced that it’s buying Bermuda-based reinsurer Validus for nearly $5.6 billion. This deal will be paid for in cash–rather than issuing more stock–a move that often hurts existing shareholders.
Insurance giant American International Group needed a $182 billion bailout from the federal government a decade ago to avoid going under. But AIG has clawed its way back from the depths of financial despair and is finally starting to make deals again.
AIG was in dire straits too. Shares plunged more than 90% in 2008 after losing billions of dollars because of a drop in the value of credit default swaps tied to subprime mortgages (loans to borrowers with bad credit that imploded as the economy tanked).
CNN