AIG refused price cut and says it has options on sale
The Prudential has confirmed it is not going to buy AIG’s Asian life unit AIA, at a cost of £450m, including a £153m break fee to AIG.
AIG is said to have consulted the US government before refusing the Pru’s demand for a price cut. And Reuters says AIG boss Robert Benmosche claims to have several options for disposing on AIA.
Prudential Chairman Harvey McGrath said: "While AIA was an excellent opportunity, since we announced the potential transaction we have seen significant falls in the markets. 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 so we feel it is in the best interest of our shareholders not to pursue this opportunity. We are therefore withdrawing from the transaction."
Thiam’s unsure future
Tidjane Thiam, group chief executive, said: "We entered into this potential transaction from a position of strength in Asia and we view the region as offering excellent growth opportunities for Prudential.
“We agreed with shareholders that a renegotiation of the terms was necessary given market movements but it has not proved possible to reach agreement.
“Our existing business in Asia has delivered another record performance in the first quarter of this year and we will continue to focus on generating sustainable shareholder value across our portfolio."
There have been calls for Thiam’s head to roll.
