tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, December 6th, 7:49AM

Insurance

rss
Latest Headlines

Prudential pulls out of AIA purchase

Prudential has abandoned its plan to buy AIG's Asian life unit, which includes AIA New Zealand, for $35.5 billion.

Monday, June 7th 2010, 8:42PM

Speculation mounted last week that the deal was on the rocks after Prudential announced it was trying to renegotiate the price.

The original deal was valued at $35.5 billion but Prudential then lowered its offer to $30.4 billion.

Prudential said late Friday that the deal was off. The collapse of the deal means that AIG may now reconsider its previous plan of selling the company through an IPO. If this happened it would be one of the biggest ever IPOs, coming in at around US$15 billion.

Prudential said it tried to renegotiate, however AIG (AIA's parent company) refused to cut the price, turning down a last-ditch effort by Britain's largest insurer to appease shareholder concerns.

"We listened carefully to shareholders over the price and initiated a renegotiation of the terms with AIG. Unfortunately, it has not been possible to reach agreement," Prudential's chairman, Harvey McGrath, said in a statement.

"We are therefore withdrawing from the transaction."

Moody's Investors Service has affirmed the Aa3 insurance financial strength rating of American International Assurance even through the deal has fallen through.

"The termination of the acquisition by Prudential has removed the integration and execution risks involved in combining two large multi-national corporations. Nonetheless, Moody's maintains a negative outlook on AIA's rating, reflecting our concerns over the disruptions in its franchise and operations in the past few months since the announcement of a possible tie-up with Prudential," Moody's Vice President Sally Yim  says.

"There has been some senior management turnover at AIA Group."

"In addition, the future ownership structure of AIA Group is still uncertain. Considering the recent volatile market conditions, it may take some time before the ownership structure becomes clearer," Yim says.

« AXA removing policy fee commissionFinance Committee report recommends some relief for small insurers »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Apex Advice buys life business
Auckland-based Apex Advice has acquired a well-established insurance advice business.

Chubb's latest champion
Young maths prodigy takes out actuarial award.

New book: Unlocking group insurance
Christchurch adviser Corey Williams has released a new book helping advisers and employers put group insurance schemes in place.

Insurer gets warning from RBNZ
Geneva Finance's insurance subsidiary Quest Insurance been given a warning from the prudential regulator.

News Bites
Latest Comments
  • Partners kills its matrix
    “@Backstage, thanks. I agree there is no relationship to CoFI, though, from a service perspective, I have two other providers...”
    2 days ago by JPHale
  • Partners kills its matrix
    “Partners Life has decided to stop using its COM for advisers as it believes the system may breach the CoFI regulations which...”
    3 days ago by Amused
  • Partners kills its matrix
    “Insurance companies should stick to their lane. They are not advisers and even those that employ advisers should not be crossing...”
    3 days ago by Tash
  • [GRTV] The nitty gritty of Smart’s ETFs
    “Advisors should consider all gateways into investment markets including cheaply priced ETFs to provide access to low priced...”
    3 days ago by Pragmatic
  • DRS member or not - client care remains advisers’ responsibility
    “FAPs are members of DRS too. Substitute “adviser” for “FAP” and the story is actually a lot more accurate. If...”
    4 days ago by Aggressively_passive
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com
x