Don't miss

Replay


LATEST SHOWS

THE INTERVIEW

'Turkey is the biggest jail for journalists in the world'

Read more

IN THE PAPERS

'The Evolution of the Presidential Portrait'

Read more

IN THE PAPERS

A sweeter pill to swallow: Fillon unveils revamped healthcare policies

Read more

BUSINESS DAILY

1.5 million fewer tourists visited Paris in 2016

Read more

THE INTERVIEW

NATO chief Stoltenberg: US is 'strongly committed to Alliance'

Read more

ACROSS AFRICA

South Sudan's refugee crisis has reached catastrophic proportions, UN warns

Read more

EYE ON AFRICA

Famine in South Sudan: More than 100,000 people face starvation

Read more

MEDIAWATCH

'Last Night in Sweden'? Trump's comment causes confusion

Read more

THE DEBATE

Mosul offensive: New phase in battle for Iraq's second city (part 1)

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)