Wed, Sep 22, 2010 - Page 12 News List

US insurance giant mulls options for its Taiwanese unit

By Crystal Hsu  /  STAFF REPORTER

US insurance giant American International Group Inc (AIG) is still weighing options about its ownership of its Taiwanese unit after terminating an agreement on Monday to sell Nan Shan Life Insurance Co (南山人壽) to a Hong Kong group.

Amanda Chou (周佳容), assistant vice president of Nan Shan, said the US parent company has yet to decide what to do with its 97.57 percent stake in its Taiwanese subsidiary.

“There is no agenda for a final decision,” Chou said by telephone yesterday.

She declined to comment on reports that AIG may float Nan Shan shares on the stock market, arrange a new auction or continue running the firm as the Financial Supervisory Commission has suggested. Debt-ridden AIG had sought unsuccessfully to transfer the ownership to a Hong Kong consortium comprising China Strategic Holding Ltd (中策集團) and Primus Financial Holding Co (博智金融).

Taiwan rejected the purchase application on Aug. 31, citing concerns the buyer group did not have sufficient funding for future capital increase needs or long-term commitment to operate the insurer.


In a filing with the Hong Kong Stock Exchange on Monday, China Strategic said all parties involved had decided to scrap the purchase agreement, effective immediately. The buyer group reportedly no longer considered Nan Shan worth the US$2.15 billion it offered to pay last year, since uncertainty about the insurer’s fate is taking a toll on its business, local media said.

Chinatrust Financial Holding Co (中信金控), the nation’s third-largest financial services provider by assets, said yesterday it remains interested in acquiring Nan Shan if AIG were to put it back on the market.

Chinatrust Financial senior vice president Vanney Cho (卓長興) said the company wanted to acquire a life insurance unit to strengthen its financial services and profitability.

“Chinatrust Financial will enter the arena again if AIG plans to sell Nan Shan,” Cho said by telephone. “We may approach the acquisition plan alone or team up with partners as long as we own a majority stake.”


However, Chinatrust Financial, which offered to pay more than its Hong Kong rival last year, declined to comment on a bidding price, saying “the situation is different from a year ago.”

Nan Shan’s assets totaled NT$1.7 trillion (US$53.52 billion) as of July 31, and it has about 40,000 employees and 4 million customers, according to company data.

The financial commission has called on AIG to keep the insurer and promised to protect the rights of Nan Shan employees and policyholders.

Joanne Tseng (曾玉瓊), deputy director-general of the commission’s insurance bureau, reiterated yesterday evening that the commission had yet to receive a reply from AIG.

Last week, Financial Supervisory Commission Chairman Chen Yuh-chang (陳裕璋) said the US company may give a positive answer. He did not elaborate.

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