Prudential ditches AIA deal

INSURER Prudential has ditched plans to buy AIA after a last ditch bid to renegotiate the price failed.

The deal – for AIG's Asian arm – had been beset by problems after a shareholder rebellion.

In March, Prudential agreed to buy AIA for $35.5bn (£24.6bn), but last week asked for the price to be cut to nearer $30bn to satisfy key shareholders.

The company's chairman, Harvey McGrath, said: "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. We are therefore withdrawing from the transaction."

The Prudential says it will pay £450m ($653m) in costs to break the deal.

Chief Executive Tidjane Thiam, who has been in the job less than a year, had championed the AIA deal, which ultimately failed to impress investors.