AIG to sell Taiwan insurance unit Nan Shan to Ruentex for $2.16 billion
13 January 2011
American International Group (AIG) yesterday said that it has a deal to sell its Taiwan insurance unit Nan Shan Life Insurance Co to Ruen Chen Investment, a consortium led by local conglomerate Ruentex Group for $2.16 billion, as part of the insurance giant's effort to repay the US government $180 billion bailout.
New York City-based AIG had been trying to sell Nan Shan, Taiwan's third-biggest insurer for the past 15 months and its previous attempt in June 2010 to strike a deal with Hong Kong-based Primus Financials for $2.15 billion fell apart after regulators voiced concerns over the competence of Primus in the insurance sector.
Ruen Chen outbid four other contenders - Fubon Financial Holding, Cathay Financial Holding, Chinatrust Financial Holding, and Goldsun Group / Primus Financial Holding.
But the current transaction that will require regulatory approval, may still face hurdles on similar issues since the buyer Ruen Chen Investment is 80-per cent owned by diversified conglomerate Ruentex Industries Ltd with shoe maker Pou Chen Corp holding the remaining 20 per cent.
AIG said that Ruentex and Pou Chen have an excellent reputation in Taiwan and strong operational and funding capabilities to meet the five guidelines of principles that has been set by Taiwan's financial regulator regarding the sale of Nan Shan.
''The participants in the consortium enjoy an excellent reputation in Taiwan. Ruen Chen offers strong operational and funding capabilities and possesses a clear ability to satisfy the strict criteria that governed AIG's bid review process,'' said Robert Benmosche, AIG president and CEO.