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The decision was made last month and the asset sale will involve AIA assets in countries like China, Singapore, Thailand, Indonesia and Malaysia. So far, about 30 buyers have been in talks with it over the issue, Edmund Tse, senior vice chairman of the US company, said in an interview on November 5. He declined to reveal more about those possible buyers, stating that formal negotiations had not been started. However, in some industry experts' opinion, China Life Insurance Co., Ltd. (SHSE: 601628 and SEHK: 2628), the biggest life insurer in China, will be one of the buyers. It is a good opportunity for it to fuel its expansion in the Asian market.
AIG will sell a small part of the assets of AIA in a bid to maintain its controlling shareholder position in the latter, added Tse. It plans to divide the targeted assets into several parts and then sell them to different buyers. In addition to prices, whether AIA can benefit from the asset sales in the long run will be key factors for it to consider when finalizing them. The bid may be full of competition, however, it does not mean that AIG can sell the assets at an expected price finally. And the money it could gain from the asset sales may hit USD 20 billion in total.
AIA, the life insurance unit AIG set up for the exploration of markets overseas, have made a long-standing reputation in Asia. As the premium assets of AIG, it enjoyed stable growth in the past few months despite of the US subprime crisis. Its operating profit reached USD 2 billion in 2007 with up to 20 million consumers spreading in 13 Asian countries.
AIG has a 9.9 percent stake in Chinese insurer PICC Property and Casualty Co., Ltd. (SEHK: 2328) and the lock-up period of the stake is due to expire soon. Previous sources said that the company was weighing a plan to sell the stake and the People's Insurance Company (Group) of China (PICC), parent of PICC P&C, would repurchase it. AIG has had no plan to sell the stake, stressed Tse. Notably, PICC has not been in talks with it over the repurchase till now.
(USD 1 = CNY 6.83)
From www.hexun.com, Page 1, Thursday, November 06, 2008 info@SinoCast.com
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