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Taiwanese Regulators Reject Sale of AIG Unit to Primus
By Sergio | Published September 02, 2010
The Financial Supervisory Commission (FSC) of Taiwan has recently announced it has rejected the planned purchase of the life insurance unit of AIG in Taiwan by Primus Financial Holdings Ltd. It is believed the FSC had concerns about Primus, which is based in the Cayman Islands, may be backed by funds from mainland China, thus in violation of the Taiwan law that prohibits Chinese investment in the financial sector.
Primus has reiterated it does not have a Chinese sponsor.
Back in October 2009 American International Group Inc. (AIG) had announced the US$2.15 billion (EUR 1.7 billion) sale of Nan Shan Life Insurance Co. to a group of investors led by Hong Kong-based Primus Financial Holdings. Also part of the investors group led by Primus is China Strategic Holdings Ltd., also based in Hong Kong.
An official with the Investment Commission of Taiwan explained that the rejection of the sale was in part due to Primus having recently named several new shareholders during the past few months and that was perceived by the SFC as a lack of stability in their operations.
Upon gaining approval of the sale, China Strategic Holdings had a deal to sell to Chinatrust a 30 percent stake in Nan Shan for US$660 million (EUR 516 million). Chinatrust Financial Holding Co., is the third-largest financial company in Taiwan. Towards the end of June 2010, there was an announcement that China Trust intended to walk away from the Nan Shan deal { http://www.globalsurance.com/blog/chinatrust-walks-away-from-nan-shan-deal-with-aig-128320.html }, and now China Strategic is considering to launch an appeal against the decision of the FSC.
On a positive note, China Strategic has been cleared by the FSC of the Chinese funding rumours.
An appeal can be made to the Taiwanese Cabinet within 30 days of having received the official rejection notice. Neither Primus nor China Strategic have insofar received such official notification.
Companies mentioned:
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
Primus is an Asia-based private equity fund focused on acquiring financial services companies. Members of the Primus Group include PFH Partnership Holdings and PMN Capital. Primus is a strategic operator in financial services with significant permanent capital, deep operational experience, and long-term financial capabilities.
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[...] Taiwanese Regulators Reject Sale of AIG Unit to Primus : International Insurance News [...]
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[...] Taiwanese Regulators Reject Sale of AIG Unit to Primus … [...]
[...] AIG had a US$ 2.15 billion bid by a consortium led by Hong Kong based Primus Financial and China Str… in September 2010 on the grounds that it was not satisfied that the bidders were interested in providing a long-term commitment to the business and on its ability to fund the transaction. [...]
[...] by AIG in the last two years to offload Nan Shan Life after an initial US$2.15 billion bid by the Hong Kong-led consortium Primus Financial Holdings Ltd was blocked. This bid was rejected by the Taiwanese regulatory authority on the grounds that the potential [...]