“The future for Nan Shan [and its employees] will be very bright,” Richard Bender, AIG’s executive vice president and chief operating officer for the greater China and India region, said at the same press conference.
However, labor union representative Jonathan Chang (張政文) said that neither AIG nor Primus Financial had offered a solution to their requests for a NT$14 billion (US$433.4 million) provident fund and pension repayments at a maximum cost of NT$15 billion.
“We hope Primus Financial is as sincere as it claims to be and look forward to our meeting [with Primus Financial]” today, Chang said.
Sources yesterday said that Primus Financial had been the second-highest bidder after Chinatrust Financial Holding Co (中信金控), but won the bid because it showed a greater willingness to address labor issues.
An analyst said the purchase price fell “within the acceptable high price range” to show a small gain for AIG, which had twice injected funds totaling US$1.78 billion into Nan Shan.
If Primus Financial is capable of expanding Nan Shan into a major regional player, the new tie-up could be a win-win deal, although the biggest challenge for Primus Financial would be to address the thorny labor issues involved, said the analyst, who declined to be named.
Citigroup analyst Bradford Ti (鄭溫煌) said that the deal was not likely to have an immediate impact on the local life insurance industry.
“We expect competition for market share to remain fierce, and it will take time for Primus to roll out its strategy initiatives for Nan Shan. Being new to the Taiwan market, building the necessary expertise to transform itself into a more meaningful player in the space poses a significant challenge,” Ti wrote in a client note.
Jonathan Lee (李信佳), senior director of the financial institutions group at Fitch Ratings Ltd Taiwan, said the tie-up would have no impact on the life insurer’s rating unless the new stakeholder were to introduce immediate changes in its business strategies.
ADDITIONAL REPORTING BY JASON TAN AND KEVIN CHEN
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