The board of American International Group approved the sale of the company's crown jewel, American International Assurance, to Prudential of the U.K. for about $35.5 billion. The sale, along with a separate deal, could generate about $50 billion, half of which will go to the Federal Reserve Bank of New York. Prudential's acquisition of AIA was welcomed by government officials because it will generate more cash to repay taxpayers.

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