Prudential in $35.5bn deal with AIA

| March 1, 2010 | 0 Comments

Prudential, which is Britain’s second largest insurer, has today confirmed it is to buy AIA, the Asian arm of US company American International Group (AIG), in a deal worth $35.5 billion (£23.3 billion).

In a stock market statement today, Pru said the deal provided it with the opportunity to create South East Asia’s leading insurer.

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

The cash call is set to be a record - closely followed by the emergency rights issues by the Royal Bank of Scotland and Lloyds Banking Group.

Meanwhile, the deal would represent a large shift in the geographical focus for Prudential. However, the deal will 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.

Tags: , AIG, finance,

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