( Updated with stock price moves.)
NEW YORK ( TheStreet) -- MetLife (MET - Get Report) was among the top performers of the financial sector Monday after the insurer reached a $15.5 billion deal to buy American International Group's (AIG - Get Report) foreign life insurance unit.
AIG said it will sell its American Life Insurance unit to MetLife for about $15.5 billion, including $6.8 billion in cash and $8.7 billion in equity securities of MetLife. AIG said the cash portion of the proceeds from this sale will be used to reduce the preferred shares in Alico held by the Federal Reserve Bank of New York.
MetLife said it expects the transaction to boost its 2011 operating earnings by 45 cents to 55 cents a share, and enable it to increase its estimated 2011 year-end operating return on equity by 140 to 160 basis points.MetLife was climbing 4.3% to $40.58. AIG shares were lately up 3.6% to $29.08. Among other insurer stocks, Lincoln National (LNC) dipped 0.2% to $26.93 and Prudential PLC (PUK) fell 1.2% to $15.70, while Hartford Financial (HIG) was flat at $26.86. Morgan Stanley (MS - Get Report) also traded higher after a report in The New York Post said the firm has hired investment banking veteran Gary Shedlin from Citigroup (C - Get Report). Shedlin, the chairman of Citigroup's global Financial Institutions Group, plans to join Morgan Stanley as a vice chairman, the report said, citing people familiar with the matter. Morgan Stanley was lately up 0.4% to $29.52, and Citigroup climbed 2% to $3.57. Most U.S. bank stocks were also trading higher. Goldman Sachs (GS) rose 1.6% to $169.87, and Bank of America (BAC) gained 0.4% to $16.76. Meanwhile, JPMorgan Chase (JPM) slipped 0.1% to $42.75, and Wells Fargo (WFC) declined 0.6% to $28.97. On the other hand, Bank of New York Mellon (BK - Get Report) slipped in early trading Monday after the bank said it will acquire BHF Asset Servicing of Germany for about $343 million. The purchase will be funded internally and the transaction is expected to be immediately accretive to earnings, Bank of New York said in a statement. Still, Bank of New York shares were down 1.2% to $29.35. Fifth Third Bancorp (FITB - Get Report) also lost ground after FBR Capital Markets analyst Paul Miller cut his rating on the stock to market perform from outperform, citing valuation. Miller maintained his stock price target of $14. Fifth Third shares were down 1.5% to $12.55.