Prudential in talks over AIG Asia
British insurer says it is in advanced talks to purchase AIA – US firm’s Asian arm.
‘No certainty’
The statement, however, gave no mention of the possible price that Prudential was willing to pay for AIA.
Also, Prudential said: “There can be no certainty that these discussions will lead to any agreement or as to the terms or timing of any such agreement”.
The deal, if approved, will transform Prudential into the world’s biggest non-Chinese insurer by market capitalisation, ahead of major competitors Allianz and AXA.
AIG on Friday reported a worse-than-expected fourth quarter net loss of $8.9bn, although the shortfall was nearly 10 times less than in 2008, when AIG recorded $99.2bn in losses.
Prudential will be transformed by the deal to buy AIA, which will double its size.
The company, founded in 1848, currently has a market capitalisation of about $23bn.
Sales in Asia already make up half of new contracts for Prudential across a number of countries including China, India, Indonesia, Malaysia and Thailand.
The company also has a strong presence in Britain and the US.
Prudential stepped in as AIG was planning an initial public offering for its Asian arm in Hong Kong in April.
Estimates had valued the market flotation at around $10bn, which would have been the largest on global markets this year.
AIG was forced into giving up some of its assets after the company’s near collapse in the depths of the financial crisis led the US government to hand it a bailout of around $180bn.
The Wall Street Journal reported that some of the proceeds from the sale of AIA to Prudential were already earmarked for US government coffers.