Prudential’s deal to acquire AIG’s Asian life insurance arm remains uncertain as the US Treasury said it has not yet considered another deal than the existing contract.
American International Group, Inc. was bailed out with a US$182.3-billion (S$256.1 billion) aid package and has been selling assets to disburse its debt. It has agreed to a huge deal to sell its Asian life insurance unit, AIA, to Prudential earlier this year. However, in recent days Prudential has entered talks to cut the US$35.5 billion price tag in a last-minute bid to recover a deal denounced by its shareholders as too expensive, sources said.
According to one source, UK’s biggest insurer wanted a 15-percent or about US$30 billion deduction.
AIG believes that US$30 billion for AIA is too low besides it is not in a hurry to do a deal. It also believes that it has many options for AIA, which is a “valuable property” and does not want to sacrifice value.
An AIG spokesperson was not available to give any comment on the current unstable equity market. However, the giant insurance firm could find other partners for the deal. A statement released late on Friday from the US Treasury Department, which bailed out American International Group, Inc. two years ago, stated that it has not looked at any substitute offer.
“Treasury has not considered any alternative other than the existing contract,” said Andrew Williams, a Treasury spokesman. “We believe AIA is a valuable business for which there is significant interest.” Prudential faces a shareholder vote on the deal in little over a week and in the coming days talks are likely to intensify.