London: UK insurer Prudential to buy AIG's Asian unit for $35.5 billion
British insurer Prudential PLC says it will buy the Asian unit of bailed-out US insurance company AIG in a deal worth US$35.5 billion.
Prudential says it will pay $25 billion in cash and $10.5 billion in new shares and other securities.
Prudential said Monday that it will raise $20 billion of the cash through a rights issue.
The combined group will be the leading life insurer in Hong Kong, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines, with the leading foreign life insurance business in China and India.
Prudential said the possible acquisition of AIA Group Ltd. "represents a unique and strategically compelling opportunity for Prudential and AIA to create the leading insurer in South East Asia."
AIG was bailed out in September 2008 by the US government as the financial crisis worsened. The insurer has received aid packages with a total value of $182.5 billion from the government. In return for that financial support, the government received an 80 percent stake in AIG.
AIG has said it planned to sell AIA or spin it off into a separate company through an initial public offering, part of an effort to pay off its debt to the U.S. government.
AIG said Friday it lost $8.87 billion in the fourth quarter as its general insurance business remained weak.