Sun America

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No. 17

AIG Acquires SunAmerica

One of the more unexpected mergers of the year was between Los Angeles-based SunAmerica Inc. and American International Group Inc.

SunAmerica, the Century-City based financial services giant led by Eli Broad, is one of the most successful and civic-minded companies in Los Angeles, so many insiders were surprised when Broad decided to sell out.

The reason: growth.

SunAmerica wanted to expand its reach into Asia, where AIG does a great deal of business. The Asian market is still relatively untapped in terms of retirement plans recessionary troubles and all and Japan, in particular, has a high potential for growth. SunAmerica also stands to gain a better credit rating out of the deal.

The $18 billion buyout by New York-based AIG is expected to close next month. After the deal is completed, SunAmerica will retain its name, management structure and Los Angeles headquarters. Broad will continue to run the company as a subsidiary, and he has emphasized that the sale would not alter SunAmerica’s overall commitment to L.A.

Jessica Toledano

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