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AIA steps back from Prudential bid

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In his first UK interview as chief executive of AIA, Mark Tucker said that the growth strategy for AIA would be organic and that the firm was looking at tactical opportunities rather than major acquisitions. Asked directly about whether he was interested in a bid, Mr Tucker said: “We’ve closed that chapter in our lives.

“We are focusing our energy here [in Asia] on an incredibly bright future with the right company, with the right people, at the right time. We have our own destiny in our hands and we have to deliver on that.

“What AIA has is that it’s in the right place at the right time. We are fundamentally about organic growth.

“We have the ability to do mergers and acquisitions but it would be tactical. The organic opportunities that we have are so significant that’s where our focus will be.”

AIA itself was the subject of a controversial and ultimately unsuccessful $35bn (£22bn) takeover attempt earlier this year led by Mr Tucker’s successor at the Prudential, Tidjane Thiam. The bid collapsed amid acrimony after investors refused to back the high-cost approach.

Mr Thiam privately said that one reason for launching the bid was because he feared an approach from AIA once it had floated on the Hong Kong exchange, an event that has now successfully taken place.

Mr Tucker said AIA was debt free and would look to become the number one company in Hong Kong. Mr Tucker made it clear that AIA would be much more competitive with the Prudential, possibly raising concerns about the stretching targets for growth Mr Thiam has set the British firm.

“The wider potential is such that the competitive forces in this part of the world mean that it’s about increasing the size of the pie rather than fighting for the next piece of it,” Mr Tucker said.

“There’s no reason why we can’t be the number one company in Hong Kong,” he said.Mr Tucker also revealed that he is set to split his combined role as chairman and chief executive.

The move is expected to be made in the first half of 2011 and is understood to be a development that the local Hong Kong financial regulator is keen to see happen.

Since Mr Tucker joined AIA in August, his priorities have been to oversee the successful initial public offering, through which it is now valued at about $35bn, and renew the board and senior management team.

Managing that change has required a combined executive chairman’s role. However, Mr Tucker now expects that to change.

“We will split it at some point probably sooner rather than later,” he said. “Putting the board together has been very important.” He confirmed he expected a new non-executive chairman would be appointed during 2011.

AIA, once part of the American AIG insurer that was bailed out by the US government during the financial crisis, began trading on the Hong Kong stock exchange at the end of October having seen the US sell 67pc of its holding in the Asian subsidiary. The rest is expected to be sold off over the next 12-18 months.

Source : The Telegraph