A major acquisition, perhaps, would soon occur in the insurance industry. Sky News reported, Prudential Plc, the largest insurance companies in the UK, will acquire a life insurance company American International Assurance Co (AIA) based in Hong Kong.
AIA is a business unit of American International Group Inc (AIG), the largest insurance companies in the U.S.. Sky News an anonymous source said that Chief Executive Officer of Prudential Tidjane Thiam, in the near future, will submit a bid proposal to the management of AIG as the parent of AIA in New York.
According to sources, the acquisition of Prudential’s offer value of U.S. $ 25 billion. Meanwhile, also citing anonymous sources, the Financial Times writes, the acquisition value could reach U.S. $ 35.5 mililar.
Portion of the business in Asia
So far, both Prudential and AIG’s management would not comment on this news. But for Prudential, this acquisition is very reasonable. In an interview with Bloomberg on February 17 last, Thiam said, Prudential will increase its new business portion of Asia up to 80% in 2015, up from the current figure of just 50%.
Eamonn Flanagan, analyst Shore Capital Group Plc, based in Liverpool, England, assess, if the plan to buy Prudential smooth AIA, Prudential markets in Asia will be even greater. ”They will become the absolute dominant force in a very large market,” he said. Today, Prudential has operations in 13 Asian countries.
According to Flanagan, in various regions of the Far East region and Asia, AIG and Prudential has put its position at number one and two. ”By joining, their bargaining power through the synergy to be higher,” he added.
Analysis Flanagan, true, no exaggeration. Established since 90 years ago, the AIA has become the crown of AIG’s business which manages assets of more than U.S. $ 60 billion and provide coverage to approximately 20 million customers. This is almost a third of the total customer AIG group.
However, until now, it is unclear whether this acquisition news will change the plans offering (IPO) at the AIA Hong Kong stock exchange that appeared in early February 2010 and then. Of IPO’s, was, AIA management hoped to reap fresh funds from the IPO of more than U.S. $ 5 billion.
Record, the release of AIA shares is part of the master plan, AIG, to pay off debt bailout worth U.S. $ 182.3 billion that the U.S. government disbursed in 2008.
