Bank of Montreal acquires AIG's Canadian business for $375 million

Bank of Montreal (BMO) has acquired the Canadian business of troubled US insurance giant American International Group (AIG) for $375 million in cash, subject to any change in book value at the time of closing. 

The deal will help AIG Life Insurance Company of Canada (AIG Life of Canada) provide its clients with a wider range of investment, financial planning and insurance solutions, the Canadian bank said in a release.

''This acquisition is a perfect extension of our existing wealth management offering and our goal to become the one-stop location for all our clients' financial and investment needs,'' BMO president and CEO Bill Downe said in the statement.

With the acquisition, the bank will also absorb 300 employees and 400,000 customers of AIG Life of Canada.

The bank said operations of AIG Life of Canada will be integrated with its insurance operations over the next six to 12 months and named BMO Life Insurance Company.

The acquisition expands BMO's capability to develop and distribute a wider array of investment, financial planning, and insurance solutions to its clients, it said.

BMO Capital Markets acted as exclusive financial advisor to BMO Financial Group on this transaction.
 
The acquisition is expected to close by June 1, 2009, subject to regulatory approval.

Established in 1817, Bank of Montreal is Canada's oldest bank, and one among the top five in the country.