
Mar
01
Prudential in negotiations to buy American International Assurance
Posted on Mar 01, 2010 by Sergio Ulloa (G+)
London-based Financial services company, Prudential P.L.C. is in talks over purchasing AIG's Asian life insurance business, American International Assurance. Although the deal has not been finalized yet, it would see Prudential buy American International Assurance or AIA for approximately US$35.5 billion; US$25 billion in cash and US$10.5 billion in stocks. AIG had been planning on an initial public offering for AIA since late 2009, placing the business in a Special Purpose Vehicle in which the Federal Reserve Bank of New York holds the preferred interests and AIG holding all common interests in AIA. The sale of AIA would pave the way for the largest repayment of the US$180 billion that AIG received in U.S. government bailouts, with the Federal Reserve Bank of New York prepared to receive billions from the sale. Hong Kong-based AIA has been operating since 1919 and is a major player in the Asian life insurance market with extensive distribution networks in 15 geographical markets and over 20 million policies in-force in the region. The addition of AIA's business operations in addition to Prudential's existing 11 million policies would make Prudential a market leader in the Asian life insurance industry. Companies Mentioned: AIA

