The sale of American international warranty, which is based in Hong Kong and is commonly known as A.I.A., would lead to the return of more large, however, towards the more than 180 million dollars, what United States Government has invested in A.I.G. as part of a large number of ransoms. The Bank of the Federal Reserve in New York, which has preferred shares in A.I.A., would receive the first of $ 16 million in proceeds from a sale.
With a shot of A.I.A., Prudential to become the undisputed leader in Asia. Prudential said that the combined group would be the starter of life in Hong Kong, Singapore Malaysia Indonesia, Viet Nam, Thailand and Philippines and leading foreign life insurance business in China, the India.
A company of 162 years - is not related to Prudential Financial in United States: Prudential UK already draws a large portion of their revenues from Asia, with more than 11 million policyholders in 13 markets.
"We are combining the two strongest in Asia international life insurers," Tidjane Thiam, Prudential Ejecutivo Chief, said on a conference call on Monday announced the agreement.
A.I.A. acquisition accelerates a strategy outlined by Mr. Thiam to sharply increase revenue the company in Asia. The region is considered one of the fastest growing insurance life thanks to a savings culture and increase the influx in many countries markets.
"Transformational is an overused word", said Mr. Thiam, "but this treatment is transformational". Noted that, in 2008, 44 percent of the new benefits of Prudential originated in Asia; If A.I.A. and Prudential merged in 2009, the figure would have been 60 percent. This geography, said, promises "sustainable growth" in the coming years.
Prudential said that the new company would assume the Prudential name, headquarters and incorporated into United Kingdom and traded on the London Stock Exchange with the New York Stock Exchange-listed depositary receipts American.
That said, A.I.A. brand is not set to disappear. "We like good brands and we tend to not kill them unnecessarily," says Mr. Thiam. A.I.A. is a strong brand.
Once the transaction is complete, the company said, "timely" intends to seek a dual primary listing on the stock exchange of Hong Kong.
Prudential said that "this transaction offers the opportunity to bring together two leading companies, combined to capture the opportunity of future growth in Asia, positioning group".
Under the terms of the agreement, Prudential would pay about 25 million dollars in cash and a combination of values, preferred shares and convertible preferred shares $ 10.5 million. The company said that he would get the cash for the transaction on a question of rights of 20 million dollars and 5 million dollars in debt.
The issue of rights must be approved by shareholders and business faces other regulatory approvals. Prudential said provides that the rights in question shall take place in May and was going to close the transaction in the third quarter.
Several analysts degraded Prudential action on Monday.
"Will greatly be dilutive," analyst ING Kevin Ryan told Reuters, speaking the issue of rights. "No one knows exactly what contains A.I.A. how cost-effective is or how it overlaps with the existing companies in the Insurance".
Prudential first approached A.I.G. last year, but was rejected since his bid was too low, according to people who was briefed on the matter.
A.I.A., founded in 1919 and one of the most ancient divisions of A.I.G., is considered one of the main business of A.I.G. The Division has about 20 million policyholders throughout Asia, served by 23,000 employees and agents of 300,000. It has customers in Australia, Brunei, China, Hong Kong, India, Indonesia, Macau, Malaysia, New Zealand, Philippines, Singapore, Korea South, Taiwan, Thailand Viet Nam.
In accordance with Prudential, A.I.A. took a $ 1,438 million operating profit after-tax during the financial year ending November 30, 2009, based on unaudited figures.
Chris V. Nicholson reported from Paris and Andrew Ross Sorkin from New York. Bettina Wassener contributed reporting from Hong Kong and Michael j. of the Merced in New York.
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