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Prudential to Relaunch AIA Offer After Gaining Support from Regulatory Firm

Posted on 10 May 2010

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Prudential is planning to relaunch its 24 billion pound ($35.5 billion) offer for American International Group's (AIG) unit AIA, this week after gaining support from the Financial Services Authority (FSA) to create a 1 billion pound ($1.5 billion) rainy day fund, according to The Guardian.

The Financial Services Authority has pressed the insurer to hold more money to pay policyholders in the event of a sudden market shock, such as a large fall in equity markets, because Prudential may be restricted from moving capital back to the U.K. from Asia following the AIA purchase. The takeover will cut Prudential’s surplus capital to regulatory requirements by 800 million pounds to 2.6 billion pounds.