AIG affiliate Corebridge raises $1.68 billion in year's largest IPO

Corebridge Financial Inc, the life insurance and retirement branch of AIG Inc, raised $1.68 billion in the year's largest initial public offering (IPO) on Wednesday, defying market turbulence and snapping a seven-month lull in significant listings.

AIG (NYSE:AIG) disclosed the sale of 80 million Corebridge shares at $21 per share, which was below the intended range of $21 to $24 per share.

Corebridge's IPO valuation is $13.6 billion.

According to a prior filing with the U.S. Securities and Exchange Commission, AIG will receive all revenues from the IPO, and the new business is not raising fresh capital.

Corebridge's share offering could assist in awakening the IPO market from its slumber. Since February, Russia's invasion of Ukraine and rampant inflation causing interest rate increases have contributed to stock market volatility, making it difficult for corporations to proceed with listing.

According to Dealogic, which has tracked listing data since 1995, IPOs in the United States are on course for their worst year in almost two decades. According to the data provider, companies have raised over $18 billion so far this year, compared to roughly $231 billion during the same period last year.

Other companies, such as social media platform Reddit and software company ServiceTitan, have been forced to postpone their IPO plans this year due to market instability.

Corebridge's $1.7 billion sale is the largest U.S. initial public offering of the year, surpassing TPG Inc.'s $1.1 billion listing in January.

BIGGEST IPO OF 2022

AIG first indicated that it will spin off its life and retirement operation and list it as a separate public company in 2020, allowing the insurance giant to concentrate on its property and casualty business.

Such a move underscores a broader tendency among insurers to concentrate on a single product offering, given their differing shareholder return profiles; a trend that AIG had successfully resisted for years, including a push by activist investors in the mid-2010s supporting a separation.

AIG filed for the Corebridge deal in March after selling a 10% interest to private equity company Blackstone (NYSE:BX) Inc for $2.2 billion the previous year. Initial plans called for the listing to be completed by the end of June, but it was delayed owing to market volatility.

The AIG subsidiary headquartered in Houston offers retirement solutions and insurance products in the United States.

AIG will own over 78% of the company's shares after the listing, with Corebridge trading under the symbol "CRBG" on the New York Stock Exchange.

The IPO's primary underwriters are JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS), and Piper Sandler Co. The primary underwriters for the IPO also include Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Goldman Sachs (NYSE:GS).