AIG may announce Taiwan unit sale today



AIG

AIG

According to reports appearing in Taiwan newspapers, Nan Shan Life – the life insurance business of American International Group in Taiwan, may be sold to the conglomerate Ruentex Group for $2.5 billion (£1.6 billion) and an announcement to that effect may take place today.

The reports are to be independently verified. However, if the deal is announced, it will mark the end of year long political and regulatory power struggle and the regulator cancelling an earlier deal, making it mandatory for AIG to pay back the bailout money it took from the US government.

However, people with inside knowledge of the developments claim that though Ruentex is seen as frontrunner, it may still not meet the five guidelines laid by the Taiwanese regulators.

Nan Shan manages assets worth T$ 1.7 trillion ($56.5 billion) and has lost close to T$25.2 billion in the second and third quarters of 2010.

Ruentex is a major hypermarket operator in China and Taiwan. Two subsidiaries – Ruentex Industries Ltd and Ruentex Development Co Ltd have tied up with a local Nike shoemaker – Pou Chen Corp to bid for AIG’s business unit in Taiwan.

Nan Shan is Taiwan’s third largest insurer by market share and has about 4 million policyholders – roughly on sixth of the total population. The two biggest players are Cathay Financial Holding Co Ltd and Fubonn Financial Holding Ltd.

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