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AIG's AIA sale has big integration risks for Pru
01 March 2010
The deal is the largest insurance acquisition ever and will make Prudential south-east Asia's largest insurer.
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UK insurer Prudential is to acquire American International Assurance (AIA), the Asian life insurance unit of American International Group (AIG), for $35.5bn. The deal is the largest insurance acquisition ever and will make Prudential south-east Asia's largest insurer.
The combined entity would have the top three market shares in nearly all markets in the region except Japan and Taiwan, where it would have a low representation. The deal could increase Prudential's profits by 35% to 65% over the next three years.
"We have a unique opportunity to create the leading pan-Asian life insurer. The combination of Prudential and AIA will create a sector powerhouse in the fastest growing markets in the world," said Tidjane Thiam, CEO of Prudential.
The deal includes around $25bn in cash, $8.5bn in equity and equity-linked securities, and $2bn in preferred stock of Prudential and will allow AIG to repay some of the money it...
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