American International Group Inc. and Zurich Financial ServicesGroup announced a $1.9 billion deal last week for the sale of AIG'sauto unit–21st Century Insurance Group–to a Zurich subsidiary,Farmers Group Inc.
Under the terms of the transaction, AIG said Farmers Group willpay $1.5 billion in cash and $400 million in face amount ofsubordinated, euro-denominated capital notes backed by ZurichInsurance Company–Zurich's principal operating unit. In addition,Farmers will also assume 21st Century's outstanding debt of $100million.
The acquisition is expected to close "no later than by the thirdquarter of 2009, pending customary regulatory approvals," Farmersnoted.
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