AIG Courting Investors Ahead of Planned IPO for Asian Life INS Unit

(August 11, 2010) — American International Group (AIG) has urged some of the globe’s largest investors to take stakes in AIA, its Asian life insurance business, ahead of a planned IPO of the unit.

Instead of offering minor stakes in the initial public offering, The Financial Times reports that AIG is considering allocating up to 30% with institutional investors and wealthy tycoons, with the most promising investors being sovereign wealth funds that include the Singapore funds GIC and Temasek, as well as several Gulf SWFs, such as Abu Dhabi, Kuwait and Qatar.

China has expressed strong interest in AIA stakes. The FT reports Chinese insurance companies and some of China’s largest banks are said to be seeking both stakes and financing others. However, it is unclear whether Chinese regulators, namely the Chinese Banking Regulatory Commission, would approve, as the move could go against insurance industry rules. On Wednesday, China’s industry regulator said its insurers are not allowed to invest more than 15% of their assets overseas and no more than 10%in one public company.

The AIA share sale is scheduled to take place by the fourth quarter of this year. AIG plans to list the unit on the Hong Kong exchange in an offering that is expected to raise approximately $15 billion. Previously, sources have told Reuters that AIG is set to name Citigroup, Deutsche Bank, Goldman Sachs, and Morgan Stanley as the joint global coordinators for the IPO.