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Prudential Said to Resume Talks Over AIG Japan Units

Posted on 16 Jul 2009

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Prudential Financial Inc. resumed talks with American International Group Inc. over the purchase of two Japanese insurance units after discussions stalled earlier this year, said two people briefed on the situation.

A sale of AIG's Star Life and Edison Life operations may yield more than $3 billion, said one of the people, who declined to be identified because the talks are private. A rival bid for the units from Manulife Financial Corp. is no longer under active discussion, the person said.

Prudential Chief Executive Officer John Strangfeld, in his second year at the helm, said in May he was looking for “opportunistic acquisitions” as the financial crisis forces rivals to scale back. Prudential, the second-largest U.S. life insurer, declined U.S. bailout cash and raised $2.4 billion from private investors in June sales of stock and debt.

“We are not simply hunkering down and riding this out,” Strangfeld said of the economic slump at the company’s annual meeting on May 12. “Our aspiration is to gain ground while our competitors are distracted or compromised.”

Prudential and AIG aren’t close to reaching an agreement on a transaction, and the talks could fall apart, one of the people said, speaking on condition of anonymity. Lauren Day, a spokeswoman for New York-based AIG, declined to comment, as did Robert DeFillippo of Prudential in Newark, New Jersey, and Laurie Lupton of Toronto-based Manulife.