US insurance giant American International Group has signaled it wants to end the sale of its Taiwan unit to a Hong Kong consortium after the deal failed to get the Taiwanese government’s approval. Taiwan’s Investment Commission late last month rejected the application for the acquisition of Nan Shan Life Insurance Co by Hong Kong-listed China Strategic Holdings and its partner Primus Financial Holdings.
While the duo has said they may file an appeal, AIG on Monday 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 of the Nan Shan acquisition.
No Nan Shan or AIG officials were immediately available for comment. Taiwan 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 2.15 billion US dollars 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. Rumours also surfaced late last year that mainland Chinese capital was involved in the deal. The consortium has repeatedly denied the rumours.
Taipei, Sept 6, 2010 (AFP)