Jan. 12, 2011, 2:14 a.m. EST
By Chris Oliver and Michael Kitchen, MarketWatch
HONG KONG (MarketWatch) — American International Group Inc. said Wednesday it has signed a deal to sell its Taiwanese unit Nan Shan Life Insurance Co. for $2.16 billion in cash.
AIG /quotes/comstock/13*!aig/quotes/nls/aig (AIG 59.37, +0.33, +0.56%) identified the buyer as Ruen Chen Investment Holding Co., a venture 80% owned by Taiwanese conglomerate Ruentex Group and 20% owned by Taipei-listed footwear maker Pou Chen Corp.
The deal included “protections for employees and agents, including an agreement to maintain the existing compensation and benefits package” and Ruen Chen “has also expressed its intention to retain the current Nan Shan management team,” AIG said.
The announcement followed an effort last year to sell Nan Shan to Primus Financial Holdings Ltd. and China Strategic Holdings Ltd. for about $2.15 billion. That proposed deal was turned down by Taiwanese regulators.
In the statement announcing the new transaction, AIG Chief Executive Officer Robert Benmosche said the new buyers “enjoy an excellent reputation in Taiwan.”
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“Ruen Chen has demonstrated that it is able and willing to invest in Nan Shan’s future, and that it will protect and serve the best interests of Nan Shan’s policyholders, employees and agents,” Benmosche said.
The fact that the buyers aren’t financial firms could cause problems in getting the deal approved, with a Dow Jones Newswires report saying Ruen Chen’s beating out several financial bidder came as a surprise to some market participants.
The report quoted a Taiwan lawmaker as saying Chinatrust Financial Holding Co. and Cathay Financial Holding Co. offered higher bids of $3 billion and $2.7 billion, respectively.
Shares of Pou Chen rose in Wednesday trade in Taipei, adding 3.2%, while....Read more
