Oct 20 2008
Prudential seeks to bid AIG Asia
Strengthening rumors of Prudential’s keen interest for bidding for the stricken US insurance giant AIG it is reported that Prudential has appointed Credit Sussie to assist them in making the decision on promising acquisitions that that could make from the insurance company AIG that has already been bailed twice by the US Federal Reserve. Looking at the present market conditions it is highly unlikely that Prudential will raise any money for any kind of purchases using its rights issue and therefore Credit Sussie has been given the responsibility to talk to potential investors on behalf of Prudential. It is worth noting that it is the Asia operation of the insurance mogul AIG excluding Japan that Prudential is most interested to acquire. The amount it expects to collect from subsequent investors to help realize this goal is about 15 billion US Dollars. Prudential seeks the investors to take a 20% stake in the company and subsequently help the company to finance its bid for the insurance giant. It has been since long that Prudential has been eyeing the emerging insurance market in Asia as a part of its global expansion plan.
Though the insurance sector has seen a drastic slip in its growth pattern in the recent times this deal never the less would come as a big boost Prudential. The recent financial tsunami has spared no one and has caused significant damage to the share prices of Prudential and other players operating in the same segment too. The yet to be named potential investor funds for the insurance bid reported to be hailing from China and Middle East are expected to pump into prudential funds in the tune of 1.2 billion Pounds. But Prudential is not the only company showing its keenness towards acquiring AIG. It is reported that the other potential buyers in the foray include French insurance giants AXA and the ING unit of Holland.
It was only last month that the US government had to come to the rescue of the world largest Insurance company AIG with a $ 85 billion bailout package which was subsequently raised to $123 billion. It is reported that AIG is keen on retaining its US property and operations along with its foreign general insurance businesses and an ownership interest in its foreign life operations while is keen to sell the rest off.