Prudential in talks over £20bn takeover
27 February 2010
Prudential is in talks about a takeover that would be one of the biggest-ever foreign acquisitions made by a British company.
The insurer is
proposing to buy AIA, one of Asia's biggest insurance groups, which is owned by
AIG, the giant US insurer rescued at the height of the 2008 banking crisis.
If it goes
ahead, a deal could cost the Pru as much as £20bn.
A takeover of
AIA would transform Prudential's prospects.
This is news
that will reverberate around the global insurance industry. If completed, the
deal would transform the Pru into by far the biggest player in the Asian
insurance industry (it's already the second-biggest international player).
The US
government will have a crucial say in whether a deal goes ahead. AIA, which has
operations across Asia, has been aiming for a listing on the Hong Kong stock
exchange.
The Pru would
finance a deal by placing up to £15bn of new shares with investors.
It may also look
to sell part of its business in Britain, although that would not be necessary
to fund the Asian deal, added our City editor.
One possible
long-term consequence of a takeover of AIA could be that the Pru would move its
headquarters from the UK, although it would retain its headquarters and main
stock market listing in London for the time being.
Prudential,
which declined to comment, has already been looking at whether to seek a
listing in Hong Kong.
