In a new development MetLife Inc. has opened negotiation with the financially bailed out American International Group to buy out its life insurance unit American Life Insurance Co (Alico).

AIG, which is nearly 80 percent owned by the government, has been planning to take Alico public as part of its efforts to repay the government, Though nothing has been finalized yet and a deal may not happen, sources point out that Metlife –AIG deal could be valued between $14 billion and $15 billion.

AIG is also looking at other options for Alico, including an initial public offering, the source said. Alico, which was founded in 1921, sells life insurance and retirement products to 19 million customers in 54 countries including India.

Last month, MetLife Chief Executive Robert Henrikson said the company was "wide open to really accretive'' acquisitions, or deals that could significantly bolster growth. In an emailed statement Tuesday, MetLife spokesman Chris Breslin said MetLife does not need to enter into a deal to meet its business objectives, and any deal it pursues would be strategically important and financially attractive.

AIG, has been supported a US aid package of roughly $180 billion and has already announced some two dozen deals to sell assets for more than $11.9 billion.

The insurer has put Alico and American International Assurance (AIA) in special purpose vehicles, and given the New York Federal Reserve a preferred stake in them. The Fed's interest in the Alico vehicle is worth $9 billion, while that in AIA is worth $16 billion.