AIG sells Asian arm to Prudential: source

US insurance giant AIG has agreed to sell its Asian arm,AIA,to British insurer Prudential for around USD 35 billion,a source close to the deal has said.

American International Group (AIG),which received a huge taxpayer bailout to stave off collapse during the financial crisis,had been persuaded to let Prudential buy its Asian businesses,the source said on Sunday. The deal will transform Prudential into the world’s top non-Chinese insurer by market capitalisation,ahead of major competitors Allianz and Axa.

It is understood the sale will be unveiled in the coming days,perhaps as early as on Monday. The purchase will be financed in cash,through a rights issue by Prudential,and through AIG taking a minority part of the British insurer,said the source.

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Tidjane Thiam,who took up the job of Prudential chief executive in October,had never hidden his desire to expand the business in Asia. The business chief,who has French nationality but was born in Ivory Coast,went to New York at the end of last week to persuade AIG’s board to sell American International Assurance (AIA) to his company.

Prudential stepped in as AIG was planning an initial public offering for its Asian arm in Hong Kong in April. Estimates had valued the market flotation at around USD 10 billion – which would have been the biggest of 2010 on global markets.

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