American International Group is to sell $590 million of shares in Bermuda-based insurer and reinsurer Arch Capital Group.

AIG, which last month appointed former Hamilton Insurance Group chief Brian Duperreault as president and CEO, acquired more than 6.38 million common shares last year through the conversion of 638,141 convertible preferred shares the US-based giant got as a result of the sale of United Guaranty Corporation to Arch.

The offering is scheduled to close on Wednesday and is subject to the usual closing conditions.

AIG said it had given underwriters a 30-day option to buy an additional 957,210 common shares in Arch, which would be issuable on conversion of 95,721 additional convertible preferred shares, worth about $89 million.

After that, AIG would still own 542,420 convertible shares in Arch, which are subject to a lock-up which expires in mid-January next year.