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Several Chinese Companies Seeking Stake in AIA

Source: MarketWatch

Posted on 20 Oct 2010

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AIA Group Ltd., the Asian life-insurance business of American International Group, has begun taking orders for this month’s Hong Kong initial public offering, according to reports, and a number of large Chinese companies are among the institutional investors seeking stakes in the insurer.

Seeking to raise up to $20.6 billion in the share sale, AIA played up its China growth strategy at a marketing event in Hong Kong on Sunday.
AIG spokesmen reportedly said they have received strong interest from institutional investors in the early rounds of marketing the offer, according to The Wall Street Journal.

Among China entities considering “substantial” stakes are China Life Insurance Co., Ping An Insurance Group /quotes/comstock/22h!e:2318 and TaikangLife Insurance Corp., according to the Financial Times.

Meanwhile, sovereign-wealth fund China Investment Corp. is seeking a stake of about $250 million, the Financial Times reported, citing a person close to the issue.

Most other significant regional life insurers, including the Asian arm of U.K. insurer Prudential PLC, are also seeking stakes, the FT reported.

However, Chinese companies reportedly declined offers to participate as cornerstone investors in the IPO, partly to avoid the appearance of bailing out a troubled U.S. insurer. But such reluctance to participate has been supplanted by a desire not to miss out on the growth opportunity in AIA, the FT report said, citing a banker.

AIA’s long presence in the region and large agent base are among its attractive assets, reports said.

AIA Chief Executive Mark Tucker reportedly told the investment gathering in Hong Kong over the weekend via a video link that the company plans to increase its exposure to mainland China by opening more offices in second- and third-tier cities.

Retail investors have been allocated about 10% of the shares on sale, and can apply for the shares from Monday.