American International Group said yesterday that it raised nearly $37 billion from the divestment of two foreign insurance units and will use that money to repay a government bailout.

AIG closed on the sale of one of its crown jewels, American Life Insurance Co., which operates in more than 50 countries. MetLife purchased the unit for about $16.2 billion, including $7.2 billion in cash and the remainder in MetLife securities. AIG raised more than $20 billion with the initial public offering of its Asian life insurance business, AIA Group Ltd.

The sale of the two units fits into AIG's plan to repay the government's $180-billion bailout in full. The repayment will include the government's taking a bigger stake in the company. Its stake in AIG is now 80 percent.

However, even after repaying the New York Fed, AIG will still owe around $100 billion.

The Treasury Department said Monday that it would make money if the value of AIG's stock and other investments remain at current prices. However, market fluctuations could alter whether the government's biggest bailout during the financial crisis turns out to be profitable.

- AP

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