Good Evening
Good Evening

Prudential Plc to buy AIG's Asia unit

LONDON - British insurer Prudential Plc said Monday it will buy the Asian unit of bailed-out American International Group Inc. in a deal worth $35.5 billion that will allow AIG to pay back some of the money it owes U.S. taxpayers.

AIG, which was kept alive by a $182.5-billion rescue by the U.S. government in September 2008, will get $25 billion in cash and $10.5 billion in new shares and securities for the sale of AIA Group Ltd.

The combined group will be the leading life insurer in Hong Kong, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines, as well as the biggest foreign life insurer in China and India, Prudential said.

AIG said it would use cash from the sale to redeem $16-billion worth of preferred interests held by the Federal Reserve Bank of New York and to repay about $9 billion to a Fed credit facility.

Prudential securities would be sold over time to make additional payments on debt, AIG said. In selling to Prudential, AIG scrapped an earlier plan for an initial public offering of AIA. "We decided that a sale to Prudential enables AIG to realize value on a faster track to repay U.S. taxpayers," said AIG president and CEO Bob Benmosche.

"This transaction, the most significant milestone to date in our ongoing effort to repay taxpayers, also gives us greater flexibility to move forward with AIG's restructuring and focus on enhancing the value of our key insurance businesses," he said. - AP

More news