UPDATE 3-MetLife eyes $14-$15 bln deal for AIG unit -source

* Deal could be valued at $14 bln-$15 bln -source

* Nothing has been finalized, deal may not happen -source

* MetLife stock up nearly 3 pct, AIG up 2 pct
(Adds analyst comment, updates share prices)

By Paritosh Bansal

NEW YORK, Jan 19 (Reuters) - MetLife Inc (MET.N) is in
talks to buy AIG's (AIG.N) American Life Insurance Co (Alico)
unit in a deal that could be valued between $14 billion and $15
billion, a source familiar with the matter said on Tuesday.

Nothing has been finalized yet and a deal may not happen,
the source said. American International Group Inc is also
looking at other options for Alico, including an initial public
offering, the source said.

A sale of Alico would be the largest for AIG since its
September 2008 bailout, and a transformational deal for
MetLife, the largest publicly traded U.S. life insurer, in the
fast-growing international markets.

"You are talking about one of the largest -- if not the
largest -- international platforms for life insurance, health
insurance and savings products in the world," Raymond James
analyst Steven Schwartz said. "So if the price was right, I
think Met would love to own Alico."

Alico, which was founded in 1921, sells life insurance and
retirement products to 19 million customers in 54 countries.

Last month, MetLife Chief Executive Robert Henrikson said
the company was "wide open to really accretive" acquisitions,
or deals that could significantly bolster growth.

Henrikson said that MetLife would be able to pay a $14
billion price tag suggested by Citigroup analyst Colin Devine
for Alico and that the company would be willing to pay a lot
for a "transformational deal."

In an emailed statement on 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 spokesman Mark Herr and Breslin declined to comment on
the news first reported by The Wall Street Journal. The source
declined to be identified because the talks are private.

AIG, which was propped up by a U.S. aid package of roughly
$180 billion, has announced some two dozen deals to sell assets
for more than $11.9 billion.

But Robert Benmosche, a former MetLife chief who took over
as AIG's chief executive last summer, has slowed the divestment
process and pulled some auctions as he tries to rebuild the
insurer's businesses.

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, but Reuters has previously reported
MetLife's interest in buying the unit.

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.

AIG shares were up 2 percent at $28.60 on the New York
Stock Exchange and MetLife was up 2.7 percent at $38.87.
(Reporting by Paritosh Bansal, editing by Phil Berlowitz, Tim
Dobbyn and Matthew Lewis)