American International Group Inc (AIG.N) is expected to announce the sale of its U.S. auto insurance unit to Zurich Financial Services AG (ZURN.VX) later on Thursday, a source familiar with the deal said.
The price of the AIG unit is expected to be between $1.5 billion and $2 billion, but closer to the higher end of the range, the source said.
The deal is expected to be for all of AIG's personal auto group and will go to Zurich's Farmers Group Inc, the source said.
Zurich, the fourth-largest European insurer, has a growing presence in the United States through Farmers insurance units, which it manages but does not own. Other U.S. operations include Zurich North America Commercial and Zurich Global Corporate, North America.
The auto insurance business is part of AIG's U.S. personal lines unit, which also includes selling products to high net- worth individuals through its AIG Private Client division. AIG Chief Executive Edward Liddy previously said the private client division is not being sold.
U.S. taxpayers have taken a roughly 80 percent stake in AIG, once the world's largest insurer, in exchange for providing up to $180 billion in financial support.
The company is trying to ditch assets in a bid to pay back the government, but has struggled to find buyers for big-ticket items.
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