CHARLOTTE, N.C. – American International Group Inc. said Monday that it will sell its American Life Insurance Co. division for $15.5 billion to MetLife Inc. The government-approved deal, AIG's second big asset sale in two weeks, will give the insurer more cash to repay the billions of bailout dollars it still owes the government.

The purchase expands MetLife's presence in Japan and high-growth markets in Europe, the Middle East and Latin America. American Life Insurance, known as Alico, operates in more than 50 countries. MetLife currently offers services in 17 countries.

It also moves AIG closer to repaying taxpayers. As of Dec. 31, the company owed the Treasury and the Federal Reserve Bank of New York nearly $130 billion. AIG's bailout package was originally worth up to $182.5 billion.

On March 1, AIG agreed to sell Asia-based life insurer, AIA Group, to Britain's Prudential PLC for $35.5 billion. The two units, while selling similar products, don't operate in the same markets in Asia.

Investors were pleased with the Alico deal, and bid AIG's shares up 3.6 percent, or $1.02, to $29.10. MetLife shares rose $1.98, or 5.1 percent, to $40.90.

MetLife will pay $6.8 billion in cash for Alico. The rest of the purchase price will be paid in stock and what are called equity units, which are eventually convertible to common stock and preferred securities

AIG will initially hold an 8 percent stake in MetLife. Its stake will reach 14 percent in early 2011 after some MetLife preferred shares are converted into common shares. The stake could reach up to 20 percent, after the insurer receives $3 billion in equity units.

"Rarely does one come across a deal that has such a strong strategic fit," MetLife CEO Robert Henrikson said in an interview with The Associated Press.

Henrikson said MetLife has been in the market for various domestic and overseas acquisitions over the past five years. He said he began discussing a possible Alico deal with AIG in December 2008, three months after the government bailout.

AIG and MetLife are based in New York. Robert H. Benmosche, the former head of MetLife, became AIG's CEO in August. Benmosche wasn't involved in the deal discussions, Henrikson said. All talks were handled by a special committee within AIG, he said.

The Alico deal, while good for MetLife, carries some risk, said Aite Group senior analyst Clark Troy.

"Japan is an aging society and MetLife may face challenges growing revenue," Troy said. "However, MetLife does have the ways and means and experience to make the deal work, as they will be building on one of their stronger franchises."

MetLife currently has a successful variable annuity business in Japan.

MetLife's international business grew significantly in 2005 when the company acquired most of Citigroup's international insurance businesses, adding Japan, Australia and Britain to its portfolio. Before then, MetLife already had operations in South Korea, Chile and in Mexico, where it is the largest life insurer.

Henrikson said he didn't consider a purchase of AIA Group because "it didn't fit MetLife's growth plans."

As the largest recipient of taxpayer bailout dollars, AIG remains under the supervision of Treasury and the New York Fed. All negotiations around Alico and AIA were monitored actively by representatives from Treasury and the New York Fed, officials from both agencies said.

Each agency has participated in every key call and meeting between directors about the deals, and discussed the available options with AIG's executives, according to officials familiar with the process. They spoke on condition of anonymity because they were not authorized to publicly discuss the negotiations.

With the latest sale, AIG will be able to slash its outstanding government debt of $129.3 billion by about $51 billion, or 39 percent, to about $78 billion. The cash portion of the Alico and AIA deals will be used immediately to pay down an investment in AIG by the Federal Reserve Bank of New York. The equity portion of the deals will be sold over time to help further repay that debt.

The government will also be selling shares it holds in AIG to recoup some of its investment.

However, it is not yet clear whether the government will be able to recover all of its investment. It's too early to tell how much the proceeds from any of the stock sales will be.

Before it nearly collapsed during the 2008 financial crisis, AIG was the world's largest insurer. It sold a variety of insurance products around the world and operated a lending and aircraft leasing businesses. It also had a financial products division that sold complex securities called credit default swaps. When the financial crisis sent billions of dollars of mortgages and bonds into default, credit default swaps undermined AIG and forced the government to rescue the company. In return, the government took a nearly 80 percent stake in AIG.

AIG has been working for the past year and a half to sell assets and streamline operations to repay its debt. Since receiving government bailout funds, AIG has 21 unit sales or asset transactions, including the Alico and AIA deals. AIG's next key sale could be Nan Shan, a Taiwanese company, analysts have said.

AIG is also looking at funding needs and exploring options for restructuring its aircraft leasing unit, International Lease Finance Corp., and its consumer and commercial lending business, American General Finance Inc.

It is also conceivable that AIG might consider sales of its American General Life and American General Life and Accident units, Aite Group's Troy said.

The company is expected to keep Chartis, its larger property and casualty insurance company; two additional Japanese life insurers, and a handful of smaller, U.S.-based companies. They are very unlikely to be sold, according to a Treasury official.

Alico has operations either directly or through subsidiaries in Europe, including Britain, Latin America, the Caribbean, the Middle East and Japan. AIA operates primarily in Asia, including China, Singapore, Malaysia, Thailand, Korea, Australia, New Zealand, Vietnam, Indonesia and India.

AIA dates back to 1919, when AIG founder Cornelius Vander Starr started his first insurance company, American Asiatic Underwriters in Shanghai. Two years later, he founded Asia Life Insurance Co., which later became Alico.

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AP Business Writers Stephen Bernard in New York and Daniel Wagner in Washington, D.C. contributed to this story.

WASHINGTON – Toyota gave detailed evidence Monday that it says disproves claims that electronics may cause the unwanted acceleration that led to the recall of more than 8 million cars and trucks.

Toyota was attempting to counter tests by an Illinois engineering professor who said Toyota engines could rev without a driver pressing on the gas. The automaker says mechanical problems, not electronics, are to blame.

Chris Gerdes, director of Stanford University's Center for Automotive Research, and a consulting firm, Exponent Inc., said the professor had tampered with wiring to create electronic glitches that could never occur on the road.

The professor's work "could result in misguided policy and unwarranted fear," Gerdes said.

The work of David W. Gilbert, an automotive technology professor at Southern Illinois University-Carbondale, has been the basis of many doubts that Toyota's mechanical fixes for unwanted acceleration will truly solve the problem.

Gilbert told a congressional hearing Feb. 23 that he recreated sudden acceleration in a Toyota Tundra by short-circuiting the electronics behind the gas pedal — without triggering any trouble codes in the truck's computer.

"We do not believe that electronics are at the root of this issue," Mike Michels, a Toyota spokesman, said during a demonstration at the automaker's North American headquarters in Torrance, Calif.

Toyota says faulty gas pedals and floor mats, not electronics, are the cause. It is fixing millions of vehicles to correct those problems. But some drivers have reported continued problems in vehicles that have already been supposedly fixed.

Federal safety regulators are investigating complaints over Toyota's repairs. Michels said the automaker is also reviewing the complaints, and that some were the result of bad repairs or other factors.

Gilbert told Congress he made a "startling discovery" that showed the electronic throttle control system could have a problem without producing a trouble code. The code sends the computer into a failsafe mode that allows the brake to override the gas.

House lawmakers seized on the testimony as evidence Toyota engineers missed a potential problem with the electronics that could have caused the unwanted acceleration.

According to Exponent, Gilbert connected sensor wires from the pedal of a 2010 Toyota Avalon to an engineered circuit, revving the engine without using the pedal. Gilbert demonstrated the method in an ABC News story last month.

Exponent said it reproduced the test on the same model year Avalon and a 2007 Camry and was able to rev the engine. But it concluded the electronic throttle system would have to be tampered with significantly to create the right conditions.

"Dr. Gilbert's scenario amounts to connecting the accelerator pedal sensors to an engineered circuit that would be highly unlikely to occur naturally, and that can only be contrived in a laboratory," an Exponent report said.

For example, Exponent said, Gilbert stripped wires in Toyota gas pedal systems of their insulation and used circuits to connect wires that were too far apart to touch each other.

Exponent said it also revved the engine of some Toyota competitors' cars using the same technique, including a Subaru Outback and a Ford Fusion. The automaker stressed its tests did not show any flaws with those models or its own cars.

Toyota's event Monday is part of a broad campaign by the world's biggest automaker to discredit critics, repair its damaged reputation and begin restoring trust in its vehicles.

On Friday, a congressional committee questioned Toyota's efforts to find the causes of the problems. It also questioned whether the company had sufficiently investigated the issue of electronic defects.

Toyota executives also will address recall issues at its annual suppliers meeting in Kentucky on Tuesday.

NEW YORK – Cablevision and ABC were negotiating a deal Monday that tentatively ended a dispute over fees and restored millions of viewers' access to the Academy Awards telecast in New York, New Jersey and Connecticut shortly after the broadcast began.

The two sides, who had been hammering at each other for days in the media, said a deal had been reached Sunday night, nearly 15 minutes into the Oscar awards broadcast.

Neither side released details about the deal, and it was unclear how permanent it would be.

Rebecca Campbell, president and general manager of WABC-TV, said the companies had "reached an agreement in principle."

"Given this movement, we're pleased to announce that ABC7 will return to Cablevision households while we work to complete our negotiations," she said in a statement.

Cablevision Systems Corp. spokesman Charles Schueler welcomed ABC's programming back to the cable operator's lineup and seemed to praise the deal.

"It is a deal that is fair to our customers and in line with our other programming agreements," he said.

A stalemate in the dispute had led ABC's parent company, the Walt Disney Co., to pull its programming from the cable operator's subscribers at midnight Saturday. The move, which imperiled viewers' access to the highly rated Oscar show broadcast, marked the first time in a decade that a major broadcast station went dark in a dispute with a cable company.

The signal was switched on at 8:43 p.m. Sunday, Cablevision said. The awards show began at 8:30 p.m.

Disney Chief Executive Bob Iger was seen in the Oscar audience, about a minute after Cablevision announced it had reached a deal to get the telecast on the air.

The cable operator's subscribers had been scrambling to hook up antennas or find live TV on the Internet to watch the Academy Awards after the signal was switched off.

The companies traded blame for the stalemate ahead of one of the most-watched nights of television.

"Cablevision has once again betrayed its subscribers," said Disney spokeswoman Charissa Gilmore. "Cablevision pocketed almost $8 billion last year, and now customers aren't getting what they pay for ... again."

The dispute is another example of how networks are struggling to find profits as advertising revenue dwindles and programming costs grow. Networks are transmitted freely over the airwaves, but expensive event programming has led the companies behind them to increasingly demand fees from cable TV and satellite operators for retransmitting those signals.

Cablevision had argued that Disney was seeking an additional $40 million a year in new fees, even though the company pays more than $200 million a year to Disney.

Disney countered that Cablevision charges customers $18 per month for basic broadcast signals but does not pass on any payment for ABC to Disney.

The dispute is similar to a standoff at the end of last year between News Corp. and Time Warner Cable over how much Fox television station signals were worth. That tussle, which threatened the college football bowl season and new episodes of "The Simpsons," was resolved without a signal interruption.

Cablevision also feuded with Scripps Networks Interactive Inc. in a January dispute that temporarily forced the Food Network and HGTV off the service. Neither side provided terms of an agreement that restored the channels after three weeks.

Disney was asking Cablevision to pay about $1 per subscriber per month, the same amount that News Corp. demanded from Time Warner in their dispute. Some analysts think News Corp. eventually accepted about 50 cents per subscriber.

Derek Baine, a senior analyst at SNL Kagan, said that if all four networks charged $1, that would total $4 a month in new fees. Most cable companies couldn't absorb that cost increase and would have a hard time passing them onto consumers, he said.

"That's a lot of money," Baine said. "They're just playing chicken here."

Disney's previous contract with Cablevision expired more than two years ago, but it was extended month by month as talks continued. Under previous arrangements, Disney gave away its ABC broadcast signal for free, a situation that most broadcasters are now trying to change.

WABC-TV is the most-watched TV station in the country, said Disney, which is based in Burbank, Calif.

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Contributing to this report were AP Business Writer Ryan Nakashima in Los Angeles and Associated Press writers Cristian Salazar in New York and Christopher S. Rugaber in Washington, D.C.