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Chinese firms in fray for AIG Asia assets

By Hu Yuanyuan (皇冠体育app Daily)
Updated: 2009-02-27 08:03

Chinese companies are holding discussions with the beleaguered US insurance giant American International Group (AIG) for buying its Asian assets, the insurance regulator said yesterday.

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Li Kemu, vice-chairman of 皇冠体育app Insurance Regulatory Commission (CIRC), said AIG executives visited the country several times, scouting for buyers for its Asian subsidiary, American International Assurance Co (AIA).

"Chinese firms' potential bids would be solely a corporate decision," said Li. "As a regulator, we care more about risks. We found that AIA's business in 皇冠体育app was stable."

AIG, facing the prospect of a third round of government aid and the largest quarterly loss in US corporate history, is trying to sell off assets to stay afloat and help pay back part of the $150 billion it borrowed after being driven to the brink of bankruptcy last year.

The major Asian assets on the block are AIG's American Life Insurance (Alico), a unit that generates more than half of its revenues from Japan, and a 49-percent stake in Hong Kong-based life insurance group American International Assurance Co (AIA).

The bid deadline for the Asian assets, roughly valued at around $15 billion, is due on Friday.

There has been some speculation that Bank of 皇冠体育app, 皇冠体育app Life and 皇冠体育app Investment Corporation (CIC) are interested in buying AIA assets. Potential bidders reportedly also include UK insurer Prudential Plc, Canadian insurer Manulife and Singapore sovereign wealth fund Temasek Holdings.

However, a top executive at 皇冠体育app Life told 皇冠体育app Daily yesterday that the company is not interested in buying AIA.

"AIG would still like to take a controlling stake in AIA, which would hardly be acceptable to 皇冠体育app Life. The integration process after the acquisition is a really tough task, with too much uncertainty," he said, adding that it was impossible for 皇冠体育app Life alone to acquire AIG's Asia assets.

"But AIA might be a good financial investment for CIC if the country's sovereign fund acquires it at a proper price," he said.

Wu Yan, president of PICC Group, also told 皇冠体育app Daily yesterday that the company had not participated in the bidding for AIG's Asia unit.

CIRC's Li said at yesterday's conference that insurers should be prudent in their overseas investments.

The regulator will allow insurers to invest more in corporate bonds, unlisted companies and commercial property, he said.