AIG nears sale of two Japanese units

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    Troubled US insurer American International Group is close to selling two Japanese life insurance units to Prudential Financial Inc. in a five billion dollar deal, a report said Wednesday.

    US-based Prudential, which is not related to Britain’s Prudential PLC, is nearing the deal to buy the two outfits known as AIG Star Life Insurance Co. and AIG Edison Life Insurance Co, the Wall Street Journal reported.

    The deal, valued at between four and five billion dollars, would help AIG repay the more than 90 billion dollars it owes US taxpayers from a government bailout, the report said. Prudential has significant operations in Japan, and it has publicly stated its interest in expanding there, the report added, citing unnamed sources as saying that a deal is “a few days away from completion”.

    AIG, once the world’s largest insurer, is nearly 80 percent owned by the US government. Authorities pumped more than 180 billion dollars into the company during the financial crisis as it crumbled under the weight of bad bets on mortgage-backed securities and other toxic assets.

    While a deal for the two Japanese units would contribute a relatively modest amount toward AIG’s overall taxpayer bill, it would be a welcome development after recent setbacks with two other sales efforts. On Tuesday Hong Kong-listed China Strategic Holdings formally called off its high-profile plan to acquire Nan Shan Life Insurance Co from AIG for 2.15 billion US dollars. British insurer Prudential’s 35.5-billion-dollar takeover bid for AIG’s Asian unit AIA collapsed earlier this year.

    However AIG on Wednesday won approval for a Hong Kong share sale of AIA, worth up to 15 billion US dollars, in what could be the world’s second-biggest stock offering this year. Hong Kong’s stock exchange gave the offering a green light with AIA expected to list on October 29, Dow Jones Newswires reported citing an unnamed source.

    Tokyo, Sept 22, 2010 (AFP)