NH1 News Debates


Oct 28, 2015 5:35 PM

Icahn says AIG 'too big to succeed,' urges a break up

The Associated Press

NEW YORK (AP) Activist investor Carl Icahn urged American International Group Inc. to split up into smaller companies Wednesday, saying that the insurance provider is "too big to succeed."

Though his Twitter account, Icahn said that he has a "large stake" in the insurer, which has a market capitalization in excess of $81 billion, but he was not more specific about its size. A representative for Icahn was not available for comment early Wednesday.

In a letter sent to AIG and posted on his website, Icahn said that AIG should separate the company's life and mortgage insurance businesses and create three separate, publicly-traded companies. Icahn said splitting up AIG would boost shareholder value and also make it more competitive.

"We believe there is no more need for procrastination, the time to act is now," Icahn said.

AIG confirmed that it had received the letter and CEO Peter Hancock said in a printed statement that significant steps have been taken to reposition AIG by simplifying and lowering risk at the company.

When Icahn describes the company as 'too big to succeed," it is a play on the phrase "too big to fail," which was used during the financial crisis to explain why the government had to prevent the total collapse of AIG.

The U.S. bailed out AIG at a cost of $85 billion, money the company has since repaid. However, it has had to cut its business dramatically to focus on its core insurance operations.

Icahn said despite the years of cutting non-core businesses, "AIG is still too large."

Shares of New York-based AIG rose $2.97, or 4.9 percent, to $63.89. Its shares are up about 21 percent in the past year.



Carl Icahn's letter to AIG CEO: http://carlicahn.com/aig-ceo-letter/


--  Dealing with the Disease of Addiction? Click here for help --

More from NH1.com

NH1 News Debates
NH1 News Replay

NH1 on Twitter

NH1 SkyView Cameras

NH1 on Facebook

Check out NH1 News Rail Polls on LockerDome on LockerDome