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AIG to Choose Prudential, Generali and Manulife as Preferred Bidders for Philippine Unit

Posted on 13 Feb 2009

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People familiar with the deal say that American International Group Inc (AIG) will be selecting Prudential Plc, Assicurazioni Generali SpA, and Manulife Financial Corp. as the preferred bidders for its Philippine life insurance unit.

Final offers are due Feb. 23, according to the sources. The unit may be sold for between $800 million and $900 million, two of the people said.

AIG has struck deals to raise more than $2.3 billion so far by selling businesses from Connecticut to the Philippines, seeking to pay down $38.9 billion borrowed from the U.S. government in December. The insurer, once the world’s biggest, said yesterday it was looking for potential buyers for its Tokyo headquarters building.

“AIG’s business in the Philippines is one of the most recognizable brands in the country,” said Rafael Garchitorena, Manila-based analyst at Deutsche Bank AG. “Buying the franchise can jump-start anybody’s attempts to expand their business. You will instantaneously be number one.”

Jose Cuisia, president of Philippine American Life and General Insurance, declined to comment, citing disclosure rules. David Monfried, a New York-based spokesman at AIG, declined to comment.

The Philippine unit, the nation’s largest insurer, has stockholders’ equity, or assets minus liabilities, of 49.5 billion pesos ($1.05 billion).

Bidding Teams

Generali, Europe’s third-largest insurer, has teamed up with Banco de Oro Unibank Inc., the biggest lender in the Philippines by assets, and Malaysia’s Kuok Group to bid for AIG’s Philippine unit, the people said. Lucia Sciacca, a spokeswoman for the Trieste, Italy-based insurer, declined to comment.

Prudential, Britain’s second-biggest insurer by market value, has joined Bank of the Philippine Islands, the people said. Edward Brewster, spokesman for London-based Prudential, declined to comment, as did Laurie Lupton of Toronto-based Manulife.

“We love all of Asia, and we love Japan,” said Manulife Chief Investment Officer Donald Guloien, who will become chief executive officer in May, in response to a Bloomberg query about the company’s bid for AIG’s Philippine assets.


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