Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

At least 3 dead in grenade attack in Bujumbura

Read more

MEDIAWATCH

Inequality, sexism and the movie industry

Read more

ENCORE!

Sienna Miller on motherhood, her new movies and Cannes glamour

Read more

THE WORLD THIS WEEK

After the Fall of Ramadi, Palmyra: Did the West Underestimate the Jihadists?

Read more

THE WORLD THIS WEEK

Migrants and Immigrants: A Global Crisis

Read more

FRANCE IN FOCUS

Behind the scenes of French gastronomy

Read more

EYE ON AFRICA

Protests continue in Burundi as calls mount for election delay

Read more

EYE ON AFRICA

Burundi: Nkurunziza delays parliamentary polls as clashes continue

Read more

EYE ON AFRICA

At least two killed in fresh protests in Bujumbura

Read more

Business

AIG sells Asian arm to UK's Prudential for $35 billion

Text by News Wires

Latest update : 2010-03-01

US insurance giant AIG has accepted a deal to sell its Asian arm, AIA, to British insurer Prudential for around 35 billion dollars, a source close to the deal said on Sunday.

REUTERS - Britain's Prudential confirmed it is in advanced talks to buy the Asian arm of AIG in a deal that would make the insurer the undisputed leader in one of the
world's fastest-growing financial services markets.

The proposed acquisition "represents a unique and strategically compelling opportunity for Prudential," the group said in a brief statement on Monday, without providing financial details.

Sources told Reuters on Sunday that the AIG board had approved a sale of the business to Britain's largest insurer for $35.5 billion, and that Prudential would finance the deal in part through a $20 billion rights issue.

Analysts say buying AIG's Asian unit, AIA, would make Pru Asia's biggest foreign insurer, boosting the company's appeal to investors seeking exposure to soaring demand for personal financial services across the region, fuelled by strong economic growth.

 

ASIAN GIANT

"An acquisition of AIA has substantial industrial logic and could be very attractive for Prudential," Sanford C. Bernstein analyst Toby Langley wrote in a note.

"Pru-AIA would have a number one market position in eight key Asian markets, and would put considerable daylight between itself and other Asian players."

Prudential is already among the top foreign insurers in Asia, generating nearly half its 2008 profit there, and has stated its ambition to broaden its footprint across the region.

The proposed acquisition, which comes after an initial approach for AIA by Prudential fell through last year, would mark the company's first major transaction under charismatic new chief executive Tidjane Thiam, who took over the top job in
October.

Prudential's shares were suspended on Monday pending a further statement, the company said.

The stock has fallen 6 percent since the beginning of the year, underperforming the European insurance share index, which is broadly unchanged.

Earlier, British insurance-focused takeover vehicle Resolution said it was not in talks to buy Prudential's UK arm. A weekend press report had said Pru might offload the unit to Resolution in the event of the AIA acquisition going ahead.
 

Date created : 2010-03-01

COMMENT(S)