Pru shareholders to fund AIG deal
Insurance giant Prudential will tap shareholders for 20 billion dollars (£13.3 billion) to fund a 35.5-billion-dollar deal to make it the largest insurer in Asia.
Pru is making the move as part of its takeover of AIA - the Asian arm of bailed-out US insurer AIG with the combined group having around 30 million customers. The insurance firm predicted 60% of new business profit would come from the fast growing region after combining both businesses.
The result would be a "powerhouse" insurer, said Tidjane Thiam, chief executive of Prudential, adding: "This transaction is hugely exciting and a one-off opportunity to transform the group.
"We believe that the combination of Prudential and AIA will create a unique life insurance business with a common set of customer-focused values and heritage. The group will continue to be headquartered in the UK following the takeover, Pru confirmed.
AIG, which is now controlled by the US government after a 182 billion dollar bail-out amid the financial crisis, will retain a stake in Pru as part payment under the cash-and-shares deal.