The Wall Street Journal is reporting that the U.S. government has taken over an 80 percent equity stake in American International Group, Inc., one of the world's largest insurers, in exchange for providing the company an $85 billion dollar bailout. In a company press release, AIG writes, "In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG." Thanks!
From the WSJ:
The step marks a dramatic turnabout for the federal government, which had been strongly resisting overtures from AIG for an emergency loan or some intervention that would prevent the insurer from falling into bankruptcy. Just last weekend, the government essentially pulled the plug on Lehman Brothers Holdings Inc., allowing the big investment bank to go under instead of giving it financial support. This time, the government decided AIG truly was too big to fail.