Updated from 1:17 a.m. EST

NEW YORK ( TheStreet) -- AIG ( AIG) reached an agreement to sell its foreign life insurance unit, American Life Insurance, to MetLife ( MET).

The unit is being sold 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.

Separately, MetLife said the equity portion of the purchase price will consist of 78.2 million MetLife common shares valued at $3.0 billion, 6.9 million shares of contingent convertible preferred stock valued at $2.7 billion and 40 million equity units having a value of $3 billion.

MetLife said it expects the cash portion of the purchase price to be financed through issuing senior debt and common stock as well as cash on hand.

The insurer said it expects the transaction to boost its 2011 operating earnings by 45 cents to 55 cents a share, and enable MetLife to increase its estimated 2011 year-end operating return on equity by 140 to 160 basis points.

The deal for Alico comes just a week after AIG agreed to sell its Asian life insurance unit to the U.K.'s Prudential ( PUK) for $35.5 billion.

Shares of AIG closed Friday up $1.37 at $28.08. Shares of MetLife ended the session up 81 cents at $38.92.

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