Wednesday, July 21, 2010

AIA Wants to Split from US Parent

American International Assurance (AIA), the Asian unit of US insurance giant AIG, is trawling for investors so it can split from its troubled parent as soon as possible, a report said Tuesday. Mark Tucker, the former head of British insurer Prudential who was named Monday as AIA's new chief executive, has sought assurances that AIA can "pursue independence immediately," the Financial Times reported, citing unnamed sources. Reports have said AIA plans to list more than half its equity in Hong Kong by October or November with the goal of raising as much as US$23 billion (about S$31.7 billion). Tucker -- who replaces AIA's current chief executive Mark Wilson -- was in talks with regulators and potential investors from Singapore, Hong Kong and mainland China, the paper said. Singapore's sovereign wealth fund Temasek has long coveted the Asian insurer, while Tucker has "good links" with Chinese insurance giant Ping An, the paper said. An independent AIA could be valued at more than US$34 billion and would be the only listed pan-Asian insurer. At least four consortia made up of private Chinese investors have approached AIG about acquiring AIA, Hong Kong's South China Morning Post reported last week. Tucker's hiring follows the collapse last month of Prudential's US$35.5 billion-takeover bid for AIA, which Wilson had opposed. The failure of the mega-deal forced AIG, which is seeking to repay billions of dollars in US government bailouts, to look again at a Hong Kong listing of AIA to raise fresh funds. AIG said it would "proceed as soon as practicable" with the listing plan. "After reviewing various options to monetize AIA's substantial value, we have concluded that an IPO is our best option," AIG chief executive Robert Benmosche said in a statement Monday.

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