The insurance giant American International Group said on Monday that it had launched a process to sell off its entire stake in the Asian insurer AIA Group, ending an association that dates back more than 90 years. AIG's 13.7-per cent stake was worth 52.2 billion Hong Kong dollars, or $6.7 billion, based on AIA's most recent share price.
Shares in the Asian insurer, which traces its roots to a firm established by an American entrepreneur in Shanghai in 1919, were suspended from trading in Hong Kong on Monday pending an announcement on the outcome of the sale process.
In the end, AIG may sell only part of its stake. AIG said it would sell the shares to institutional investors and will use the proceeds from the deal for general corporate purposes.
AIG last week became a fully private enterprise for the first time since 2008 after the US Treasury sold its remaining shares in the company in a $7.6-billion deal.
The American insurance giant has been gradually reducing its stake in AIA since the Asian insurer was first spun-out in a Hong Kong stock market listing in 2010 that raised 159.1 billion Hong Kong dollars, or $20.51 billion — the third biggest initial public offering in the world at the time.
In September, AIG raised about 15.7 billion Hong Kong dollars, or $2 billion, when it sold a portion of its shares in AIA at 26.50 Hong Kong dollars apiece. That deal included a three-month lockup on AIG selling additional shares in AIA which expired December 10.
The Asian insurer's stock last traded on Friday at 31.65 Hong Kong dollars.
AIA has a network of 260,000 agents and over 21,000 employees across the Asia-Pacific, and is the leader in the life insurance market in several countries in the region.
However, AIG's move to cash out of AIA doesn't mean it is exiting Asia altogether. The American company last month announced plans for a Chinese joint venture with the People's Insurance Company (Group) of China.
As part of their cooperation, AIG bought a $500-million stake in PICC during the Chinese company's Hong Kong stock market listing.
The American and Chinese insurers said they planned to distribute life insurance and other insurance products in major cities across China, and intended to sign final documentation of the joint venture by May 31 of next year. AIG also owns 9.9 per cent of PICC Property and Casualty, a subsidiary of the Chinese group that is also listed in Hong Kong.
© 2012 The New York Times News Service
