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Quick Hits: Canadians Eye AIG


Brief scrutiny of today's headlines.

Canada's Manulife Financial (MFC) may bid on part of AIG (AIG), the Toronto Globe and Mail reports.

Citing unnamed sources, the newspaper says Manulife executives met with financial advisers last week to consider ways to take advantage of AIG's probable breakup.

The Globe and Mail didn't get a comment from Manulife.

Manulife, the largest North American insurer by market value, might be interested in AIG's US variable annuity business. In addition, Manulife executives have said they want to enter the Japanese and Chinese wealth management markets. AIG's strength is its Asian operations and group pension business in the US.

Last week, the Federal Reserve agreed to lend AIG as much as $85 billion in exchange for 79.9% of its equity.

The Wall Street Journal reported earlier that AIG plans to sell its auto insurance and asset management businesses, and may also sell International Lease Finance Corporation, its aircraft leasing business. ILFC is the largest customer for Boeing (BA) and Airbus, giving it top placement in the aircraft manufacturers' order books and making the company attractive to prospective buyers.

There's no estimate of what that the price might be, but as of June 30, IFLC's equipment under lease were valued at about $55 billion. Cash-rich General Electric (GE) is ILFC's closest competitor in aircraft leasing and could probably just write a check - a key consideration in the current market.

However, there might be antitrust issues, and some investors increasingly view GE as a financial services company.

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