AIG and Blackstone Launch Partnership to Advise Asian Companies On Restructuring and M&A Strategies.

NEW YORK and HONG KONG--(BUSINESS WIRE)--June 2, 1999--

AIA Capital Corporation, the flagship investment and financial advisory unit for Asia of American International Group, Inc. (AIG), and The Blackstone Group, a private New York-based investment bank, announced today that they had formed a partnership to pursue restructuring, mergers and acquisitions, and related capital raising advisory assignments in Asia. The two organizations will collaborate on an exclusive basis in Indonesia, Thailand, Malaysia, Singapore, and Hong Kong and on a non-exclusive basis in other Asian markets.

"In the wake of the Asian crisis, many Asia-based corporations are in need of advice on restructuring their operations and raising capital," said Jaime C. Gonzalez, Managing Director of AIA Capital. "With the breadth of relationships and infrastructure that we have built throughout Asia, and with Blackstone's leadership position among Wall Street investment banks in restructuring and its experience in large scale trans-Pacific M&A assignments, we will be able to provide Asian companies with the advice and capital they need to overcome the current challenges they face."

Tim Coleman, a Senior Managing Director of The Blackstone Group added, "Having advised on over US$85 billion worth of restructurings in the U.S., Europe, and Asia- including some of the largest bankruptcies in U.S. business history-we bring a strong portfolio of restructuring experiences and best business practices to the current environment in Asia. AIG and AIA Capital have developed incredibly strong long-term relationships throughout Asia, as well as earned reputations for outstanding financial expertise and client service. By combining Blackstone's restructuring and M&A expertise and capital raising skills with AIA Capital's financing expertise, we will be able to jointly provide a full set of advisory and capital raising services to Asian companies. In the end, there are very few pure restructuring assignments in Asia. Almost every large enterprise that needs our restructuring advice ultimately needs to raise capital or consider dispositions, asset sales or mergers with global partners."

Separately, AIA Capital and The Blackstone Group have each been involved in a number of significant Asian M&A and restructuring assignments since the onset of the Asia crisis in 1997. The new combination of forces and mutual synergies should allow the two firms to expand their range of advisory assignments significantly.

In July 1998, AIG and Blackstone announced an investment agreement valued at US$1.35 billion, under which AIG acquired a minority equity interest in The Blackstone Group and agreed, pending the achievement of certain performance benchmarks, to invest in future private equity, real estate and other funds sponsored by Blackstone.

"The need for restructuring is very great in Asia today and I have been impressed with The Blackstone Group's capabilities in this area," said Maurice R. Greenberg, Chairman and CEO of AIG. "This new initiative is a very good fit in a market environment that has a very strong need for exactly the kind of advisory services that AIA Capital and Blackstone are ideally suited to offer."

Stephen A. Schwarzman, President and CEO of The Blackstone Group, noted, "Even in an age of global capital markets, there is no substitute for local knowledge. Working in Asia with AIG, we will benefit greatly from their 80 years of experience in that part of the world and an extraordinary track record of growth, profitability, and success in the emerging markets of Southeast Asia."

Blackstone's Restructuring and Reorganization group has advised debtors and creditors in more than 85 restructurings since 1992, including some of the largest and most complex situations, such as Macy's, Barney's, Montgomery Ward, Dow-Corning, Executive Life, Criimi Mae (a large publicly traded Real Estate Investment Trust), LTV, and Federated Department Stores. The firm's M&A group has been involved with large trans-Pacific Mergers and Acquisitions for more than a decade, having advised on some US$20 billion worth of M&A transactions between U.S. and Asia-based companies. Blackstone's private equity and real estate funds, which together comprise some US$5 billion of available equity capital, have become increasingly active in Asia recently, looking for attractive investment opportunities amid the turmoil of the Asia crisis.

Peter G. Peterson (Chairman) and Stephen A. Schwarzman (President and CEO) founded the Blackstone Group in 1985. Mr. Peterson is well-known in many Asian countries from his days in government, where he served as Commerce Secretary in the Nixon administration, his years at the helm of Lehman Brothers, his role as a Director of the Sony Corporation, his chairmanship of the Institute for International Economics (the world's leading think tank devoted to cross-border trade, investment, and currency issues), his chairmanship of the Council on Foreign Relations (America's leading private sector foreign policy organization), and his many involvements with trans-Pacific public policy initiatives.

Based in Hong Kong, AIA Capital also maintains a full service office in Singapore and is active throughout the region with offices in Taiwan, Japan, the Philippines, Korea, India, and Thailand. The company provides high value added advisory services for debt and equity financing, private placements of debt and equity capital, corporate restructurings, mergers and acquisitions, and direct investment strategies. Similar expertise is available to clients in project finance, particularly for infrastructure and large scale industrial projects. AIA Capital works closely with AIG, which, through its local subsidiaries, has access to significant amounts of direct investment capital and long-term fixed rate local currency financing. AIA Capital enjoys outstanding relationships throughout the Asia Pacific region's financial, industrial, and governmental sectors.

AIG is the leading U.S.-based international insurance organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write property, casualty, marine, life and financial lines insurance in approximately 130 countries and jurisdictions, and are engaged in a range of financial services and investment management businesses. American International Group, Inc.'s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.