The equities business of Zurich, Switzerland-based UBS Investment Bank announced today that it has agreed to purchase the commodity index business of AIG Financial Products Corp. for a price that could total $150 million.
The transaction includes AIG's rights to the DJ-AIG Commodity Index business that is comprised of a product platform of commodity index swaps and funded notes based on the benchmark Dow Jones-AIG Commodity Index (DJ-AIGCI).
The transaction calls for $15 million to be paid at closing, and additional payments of up to $135 million over the following 18 months based upon future earnings of the purchased business.
The transaction is expected to close by May 2009.
The remaining portion of AIG Financial Products, which was not purchased contains its derivatives business, which caused the company huge losses requiring it to sell off assets in order to repay the billions in government loans that have enabled it to stay in business.
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