American International Group Inc. and Zurich Financial Services Group announced a $1.9 billion deal last week for the sale of AIG’s auto unit–21st Century Insurance Group–to a Zurich subsidiary, Farmers Group Inc.

Under the terms of the transaction, AIG said Farmers Group will pay $1.5 billion in cash and $400 million in face amount of subordinated, euro-denominated capital notes backed by Zurich Insurance Company–Zurich’s principal operating unit. In addition, Farmers will also assume 21st Century’s outstanding debt of $100 million.

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