US insurance giant American International Group (AIG) has signaled it wants to end the sale of its local unit to a Hong Kong consortium after the deal failed to get the government’s approval.
Last week the Financial Supervisory Commission rejected the application for the acquisition of Nan Shan Life Insurance Co (南山人壽) by Hong Kong-listed China Strategic Holdings (中策集團) and its partner Primus Financial Holdings (博智金融).
While the pair have said they may file an appeal, AIG yesterday seemed to backtrack from a previous undertaking to press ahead with the sale.
China Strategic said in a statement that AIG “has indicated its current view that it would be in the best interests of the parties to terminate the share purchase agreement,” in respect to the Nan Shan acquisition.
No Nan Shan or AIG officials were immediately available for comment.
Local authorities said they feared the consortium lacked the experience needed to manage an insurer and charged it had failed to provide a long-term management commitment, allegations flatly rejected by the Hong Kong consortium.
Rejection of the bid came as a blow to AIG, once the world’s largest insurer, which has been selling assets to pay back US government loans since its rescue from collapse during the 2008 financial crisis.
The Hong Kong consortium agreed to acquire Nan Shan Life from AIG for US$2.15 billion in October last year, but the deal has been in limbo since November when China Strategic announced a plan to sell a 30 percent stake in Nan Shan to Taipei-based Chinatrust Financial Holding Co (中信金控).
Rumors also surfaced late last year that Chinese capital was involved in the deal.
The consortium has repeatedly denied the rumors.
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