MetLife to Share $190 Million Tax Refund With AIG, Former Owner of Alico
March 7, 2013 by Meg Green
NEW YORK, Mar 01, 2013 (A. M. Best via COMTEX News Network) — MetLife Inc. said it would share a $190 million tax refund with American International Group Inc., the former owner of American Life Insurance Co.
In December, the Tokyo District Court ruled in favor of American Life’s Japan branch in a tax case related to the deduction of unrealized foreign exchange losses on securities dating back to before MetLife’s acquisition of Alico, MetLife said in its annual report filed with the U.S. Securities and Exchange Commission.
American Life will receive a refund of 16 billion yen ($173 million) related to income tax, interest and penalties, of which $160 million has been collected at Dec. 31, 2012.
Under the indemnification provisions of its acquisition agreement, MetLife is required to remit the refund to AIG, net of certain amounts it can retain as a counter claim, the company said.
The receipt of the refund, net of obligations to AIG and corresponding U.S. tax effects, is expected to result in a $30 million charge to net income and a slight decrease in MetLife’s overall effective tax rate in the first quarter of 2013, the company said.
MetLife Inc. acquired Alico from AIG in November 2010 for $16.2 billion (Best’s News Service, Nov. 1, 2010).
The acquisition was to greatly expand MetLife’s geographic footprint, especially in Japan, the world’s second-largest life insurance market.
Late morning on March 1, shares of MetLife (NYSE: MET) were trading at $35.20 a share, down 0.67% from the previous close, while shares of AIG (NYSE: AIG) were trading at $37.60 a share, down 1.09% from the previous close.
Metropolitan Life Insurance Co. currently has a Best’s Financial Strength Rating of A+ (Superior). AIG’s subsidiaries have Best’s Financial Strength Ratings of A (Excellent).
(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)
Meg Green
Copyright (C) 2013 by A. M. Best Company, Inc.
