The fire sale of AIG assets has accelerated with the divestment of the American insurer’s life arm for $US15.5 billion ($16.9 billion).

The sale of Alico to MetLife comes a week after Prudential snapped up AIG’s Asian life group, AIA, for $US35.5 billion ($38.8 billion). That deal included the company’s Australian operations, based in Melbourne.

MetLife is already the largest life insurer in the US, and the acquisition of AIG’s life unit gives it considerable scale to expand into Japan – the world’s second largest life insurance market – as well as Europe, the Middle East and Latin America.

Alico has interests in more than 50 countries, but no presence in Australia.

AIG and MetLife have agreed to a part cash/scrip deal for Alico, including $US6.8 billion ($7.43 billion) in cash and $US8.7 billion ($9.5 billion) in equity. All cash proceeds from the sale will be diverted to the Federal Reserve Bank of New York to pay off part of AIG’s debt.

Combined with the AIA sale, AIG will be in a position to repay the bank more than $US31.5 billion ($34.4 billion) in cash and another $US19.2 billion ($20.9 billion) in securities over time.

After both sales have been processed, the bank will still hold roughly $47 billion ($51.34 billion) in equity investments.