INSURANCE giant AIG is today set to sell its remaining stake in AIA in a block offering worth up to $6.5bn (£4bn), exiting the Hong Kong-based business it founded almost a century ago.
It is understood that AIG’s remaining 13.7 per cent stake in AIA is being priced at 29.65–30.65 Hong Kong dollars a share, below Friday’s closing price. Trading was halted yesterday while the placing was completed.
The Asian insurance market is booming as the emerging middle class buy its products for the first time. However AIG has been forced to dispose of the prized asset after the US government bailed out the group to the tune of $182bn at the height of the 2008 financial crisis.
After a deal to sell the business to Prudential collapsed in 2010, a two-thirds stake was floated in Hong Kong for $20.5bn. Since then AIA’s share price has rocketed by more than 60 per cent while AIG has continued to sell down its stake.
Both firms trace the roots back to 1919 when a 29-year-old American named Cornelius Vander Starr starting selling insurance from his Shanghai office. He later returned to New York where he ran operations under the AIG brand but retained ownership of the Asian operation under a different name.
Earlier this month AIG sold most of its aircraft-leasing division for $4.2bn and last Friday the US Treasury disposed of its final shares in the group.