Prudential in advanced talks with AIA

| March 1, 2010 | 0 Comments

Prudential, which is Britain’s second largest insurer, is understood to be in ‘advanced talks’ to acquire AIA, the Asian arm of US company American International Group (AIG).

AIA is a key part of AIG with around 20 million customers and reports say the deal could cost about $30 billion (£19.6 billion).

In order to finance the deal, Pru is understood to be embarking on a rights issue of around £13 billion.

Prudential has declined to comment on the deal but reports say the insurer will issue a statement to the market this week.

Should a purchase go ahead, it would mean a large shift in the geographical focus for Prudential. However, a deal would need to be approved by the US Government, which owns 80% of AIG.

AIG was bailed out by the US Government in 2008 to save it from collapse and it has received more than $180 billion in funding.

A year ago, it posted the biggest quarterly loss in US corporate history.

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