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AIG's AIA Confirms Hong Kong Listing

Source: WSJ

Posted on 04 Dec 2009

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American International Group Inc. (AIG) said Thursday it chose Hong Kong as the listing venue for AIA Group Ltd., in the clearest sign yet that the U.S. insurer will go ahead with the up-to-US$10 billion initial public offering of its Asian life insurance unit.

Preparations for the IPO, aimed at raising funds to repay a U.S. government bailout, had stalled since Bob Benmosche took the helm at AIG in August. Mr. Benmosche has repeatedly said AIG is in no hurry to sell assets at unfavorable prices, sparking concerns that the planned listing of AIA—first announced in May—will be put on hold.

"The planned listing is in the best interests of policyholders, distribution partners, AIG shareholders and U.S. taxpayers," Mr. Benmosche said in a statement Thursday. "AIA's roots are in Asia, and a listing in Hong Kong is a natural choice."

AIA left the date open. "The timing of any offering will be dependent on market conditions and regulatory approvals; we will only list when we are ready," AIA Group Chief Executive and President Mark Wilson said.

Hong Kong has been the world's most active market for IPOs this year in terms of total funds raised, having raised US$24.1 billion so far this year, according to Dealogic.

AIG said in May it intended to float AIA, formerly known as American International Assurance Co., on an Asian market, without specifying which one.

Deutsche Bank AG and Morgan Stanley were mandated as joint global coordinators for the planned initial public offering the following month, people familiar with the situation said in June. Since then, there has been no news on the list of other advisors on the syndicate.

The people said AIA's IPO could raise between US$5 billion and US$10 billion. A document sent to banks in May said the IPO will take place in the first half next year. AIA

recently renamed its Asia headquarters in Hong Kong "AIA Central" from "AIG Tower" earlier this year, in a bid to distance itself from its troubled parent.

Part of the IPO proceeds is expected to repay the US$180 billion in government bailout AIG received since the onset of the financial crisis last year. It still has US$120.7 billion outstanding.

AIA's business scope covers life insurance, retirement planning, accident and health insurance as well as wealth management solutions across 15 markets in Asia, including China, Hong Kong, Australia, South Korea, Taiwan and Vietnam.

In a step to prepare for an eventual listing, AIG on Tuesday placed both AIA and American Life Insurance Co. or Alico in special purpose vehicles.