Wednesday, May 26, 2010

AIA Chief Threatens to Quit

AIA’s chief executive has told friends and industry executives

that he would quit if the UK’s Prudential succeeded in its

US$35.5billion (GBP24.6billion) takeover of the Asian

businesses of AIG.

Mark Wilson has said he would step down once the deal

closed because the proposed combination of both Asian

businesses was “unworkable”.

Hong Kong-based Mr Wilson, 43, joined AIA from AXA in 2006

and boasts more than a decade of senior management experience

in the Asian insurance industry.

According to an undisclosed source, Mr Wilson “remains loyal”

to AIA, but does not plan to stay with the merged group

because he feels it is “a disaster waiting to happen”.

How many senior AIA executives, actuaries and agents remain

following a takeover is crucial for the combined group if it is to

execute the integration and deliver the sales increase being

flagged to investors to justify the price.

The news of Mr Wilson’s threatened departure comes amid

Prudential’s battle to win shareholder support for the takeover

and the US$21billion rights issue to fund it ahead of a vote on

June 7.

Investors have expressed concerns about the price tag for AIA

and Prudential’s ability to manage a complex integration in 12

Asian markets.

The uncertainty over Mr Wilson’s future will also cast a shadow

over Tuesday’s dual listing of the UK life assurer in Hong Kong

and a secondary listing in Singapore.

Prudential said on Monday that about 2 per cent of its shares

had been registered in Hong Kong ahead of the listing.

The Prudential prospectus for its rights issue released last

week said Mr Wilson would remain chief executive of AIA after

the takeover. However, it would be relatively unconcerned if he

did leave, according to one person familiar with Prudential.

The company told investors that it had moved quickly to stabilise

AIA by putting retention packages in place for senior

individuals. “Getting the people aspect right is vital and we

have moved quickly to stabilise the AIA business and put in

place appropriate retention arrangements,” Tidjane Thiam,

Prudential chief executive, said at an analyst presentation.

It was unclear whether Mr Wilson was offered these retention

arrangements. But the AIA chief has deep misgivings about

Prudential’s ability to execute the transaction or manage

relations with AIA staff and agents, people familiar with the

situation said.

Steve Roder and Peter Cashin, AIA’s finance and legal chiefs

respectively, have already quit the company.

Mr Wilson is widely credited with saving AIA last year when

AIG, its US parent company, nearly collapsed, earning the

loyalty of senior staff and agents. He also prepared AIA for an

initial public offering that was aborted three months ago in

favour of the Prudential deal.

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