Ultimately giving it more than 20 percent of MetLife.

American International Group was closing in on a deal on Sunday to sell its foreign life insurance unit to MetLife for about $15 billion in cash and stock, ultimately giving it more than 20 percent of MetLife, sources familiar with the matter said.

A deal for the unit, American Life Insurance Co (Alico), could be announced as soon as Monday, the sources said, declining to be named because it was not yet final.

MetLife's board was expected to meet later on Sunday to weigh the transaction, according to the sources. AIG's board met Friday and gave the task of final approvals to a special committee, which did so on Sunday, the sources said.

MetLife, the largest publicly traded U.S. life insurer, is expected to pay AIG about $7 billion in cash and the rest in equity, these sources said.

The equity component of the purchase price includes about $3 billion in convertible preferred, and the rest in common stock and temporary securities similar to common shares, the sources said.

AIG will hold below 20 percent of MetLife as a result at closing, a stake that is expected to increase to above 20 percent -- but below 25 percent -- later, after MetLife's shareholders approve the conversion of the temporary securities to common stock, these sources said.

The deal would be the second major asset sale by AIG in a week and will allow the insurer to repay billions to the U.S. government.

The cash component of the consideration is expected to be used to pay down the $9 billion preferred interest that the Federal Reserve Bank of New York holds in the unit, sources said. The equity will be sold over time to redeem the remaining interest, they said.

AIG, which is nearly 80 percent owned by the U.S. government, declined to comment. MetLife was not immediately available for comment.

The insurer, which is trying to pay back the government after a $182.3 billion taxpayer-funded rescue, agreed to sell its Asian life insurance unit to Britain's Prudential Plc (PRU.L) last Monday for $35.5 billion, the largest insurance deal ever.

(Reporting by Paritosh Bansal; Editing by Diane Craft)

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