Home Financial News AIG: Chinese consortiums eye AIA takeover

AIG: Chinese consortiums eye AIA takeover

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At least four consortiums made up of private Chinese investors have approached US insurance giant AIG to acquire its Asian unit AIA, a Hong Kong newspaper reported Tuesday.

The investors approached American International Group and the US Treasury Department shortly after Britain’s Prudential aborted a plan to take over AIA in June when its shareholders balked at the 35.5 billion US dollar cost, the South China Morning Post reported.

It sid all the mainland investors involved indicated they had strong backing of Chinese insurers or banks. It said one of the consortiums is led by Shan Weijian, chairman of the large Asian investment firm Pacific Alliance Group.

Another consortium is led by Zhang Songqiao, chairman of Hong Kong-based property group CC Land Holdings. Zhang is also a major shareholder in Hong Kong-based China Strategic Holdings, the report said.

The third consortium is led by Guo Guangchang, chairman of Shanghai-based Fosun Group, a large non-state-owned investment conglomerate, according to the newspaper. The fourth is a group of Hong Kong and Taiwanese investors.

Analysts were baffled at why so many private Chinese investors were eyeing the AIA bid, the Post said. Some speculated that the central government would be forced to make a decision soon on whether it wanted to back one of the four consortiums or use a new investment vehicle.

“The AIA business has standing in Asia. As Chinese insurers are expanding and banks have the ambition to develop insurance business, AIA is a suitable target,” Wang Xujin, a professor at Beijing Technology and Business School, told the newspaper.

In May, Prudential took out secondary listings in Hong Kong and Singapore to woo Asian investors ahead of a planned issue of shares designed to raise 21 billion US dollars to help fund the now-aborted AIA takeover. The huge transaction would have been the biggest-ever takeover in the insurance sector.

Hong Kong, July 13, 2010 (AFP)