American International Group Inc’s (AIG) initial public offering of its main Asian unit values the company at as much as US$30.5 billion, three people with knowledge of the matter said.
AIG, the bailed out insurer, plans to sell about 50 percent of AIA Group Ltd in the initial public offering in Hong Kong, said one of the people, who declined to be identified because they aren’t authorized to discuss the deal publicly. The exact stake to be sold was to be determined yesterday, the person said.
The high end of the valuation range for AIA matches the US$30.4 billion revised bid from Prudential PLC that AIG turned down four months ago. At about US$15 billion, the IPO would be the largest in Hong Kong since the sale of Industrial & Commercial Bank of China Ltd (中國工商銀行) in 2006.
AIG, once the world’s largest insurer, is selling assets to help repay US$182.3 billion of government bailout. Prudential Financial Inc, the second-largest US life insurer, last week agreed to pay US$4.8 billion for two of AIG’s Japanese life insurance units.
AIG had to lower the valuation of AIA to ensure a US$1 billion investment from the Kuwait Investment Authority, the Financial Times (FT) reported on Sunday, citing unidentified people. Kuwait agreed to invest on the basis that AIA would be valued at US$30 billion to US$32 billion, the FT said.
A number of Hong Kong tycoons are among other big investors to have signed up for cornerstone stakes, FT said.
AIA was talking to institutional investors such as BlackRock and Capital Group over the weekend to try and secure major investments, according to the report.
Meanwhile, AIG is in talks to sell its mutual fund business in India for about US$10 million, India’s Mint newspaper reported yesterday.
AIG is in talks with at least four asset management companies to sell its AIG Global Investment Group Mutual Fund for 4 to 5 percent of the value of its assets under management, which total 10.2 billion rupees (US$230 million), the Mint reported, citing three unnamed sources with knowledge of the deal.
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