DEALTALK-AIG's sale of prized Asian asset faces tough slog

viernes 23 de enero de 2009 12:01 CET

(For more Reuters DEALTALKS, click [DEALTALK/])

By Michael Flaherty

HONG KONG Jan 23 (Reuters) - American International Group's (AIG.N: Cotización) sale of a minority stake in its more than $20 billion Asian life insurance unit faces an uphill climb in a down market.

AIG's subsidiary, American International Assurance Company Ltd. (AIA), has a long history in the region, particularly in China, and has dominant market share in several, fast-growing countries. That's an enticing prospect for any buyer bullish about not just the company's future, but Asia broadly.

But the sale process faces several challenges, including falling demand across the insurance industry, lack of funding for buyers, and short-term economic outlook that is anything but bright.

"It's true that it's tough times at the moment," said Fitch Ratings director Paul Clarkson, who covers insurance companies.

"The life insurance industry is facing the same problems as elsewhere. Investment linked products are gone at the moment. Bank assurance has dried up. New business is down."

The plans to sell up to 49 percent of AIA were put in place last fall, shortly after the U.S. government saved AIG from bankruptcy in September with a rescue plan that has since ballooned to around $150 billion. [ID:nN10464039]

Reuters reported in October that Citigroup and Goldman Sachs were advising AIG on its Asia sales. Both banks declined comment on Friday.   Continuación...