American International Group announced Monday it has reached anagreement to sell its international life and health insurance unitAlico to MetLife for approximately $15.5billion.

MetLife will pay $6.8 billion in cash and the remainder inequity securities. The cash portion will be used to pay down a$47.9 billion investment in AIG by Federal Reserve Bank of NewYork.

"This sale is an important step toward repaying the government,"said Harvey Golub, chairman of the AIG board of directors, in astatement released Monday. "Alico is a unique international lifeinsurer, and we view this as a terrific combination that willfurther enhance the company's potential over the long term."

Last week, AIG announced it had reached an agreement to sell Asian life insurer AIA for $35.5billion. The combined deals add up to about $51 billion AIG sayswill be used to pay down its debt to the government.

"With this sale of ALICO, along with the sale of AIA toPrudential plc announced last week, we are on track to generateapproximately $50.7 billion from these two transactions alone,consisting of approximately $31.5 billion in cash to repay theFRBNY, plus another approximately $19.2 billion in securities thatwe will sell over time to repay the government. In addition, bothsales give AIG greater flexibility to move forward with ourrestructuring and rebuilding efforts, and focus on enhancing thevalue of our key insurance businesses," said Harvey Golub, Chairmanof the AIG Board of Directors.

AIG owes the federal government nearly $130 billion in bailoutfunds.

According to the Wall Street Journal, Standard & Poor's on Monday saidit is keeping most of MetLife's ratings on review with negativeimplications. "The transaction should enhance both business andfinancial profiles in the long term, but we believe it carriessignificant execution risks and comes at a time when capitalizationis weak for the rating," S&P said.

Upon completion of the transaction, MetLife (already the largestlife insurer in the United States and Mexico) says it will become aleading competitor in Japan, the world's second-largest lifeinsurance market.

The transaction materially advances MetLife's position inEurope, according to a statement. It also moves MetLife into a topfive market position in many high growth emerging markets inCentral and Eastern Europe, the Middle East and LatinAmerica.

"With this acquisition, MetLife is delivering on its strategy toaccelerate international expansion as a powerful growth engine forthe company," said C. Robert Henrikson, chairman, president andchief executive officer of MetLife, Inc, in a released statement."[The] transaction will bring together two profitable,complementary, well-established businesses with superb trackrecords and strong long-term growth potential. We expect it willincrease MetLife's return on equity and be accretive to operatingearnings."