ID :
22718
Sun, 10/05/2008 - 22:07
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https://oananews.org//node/22718
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Allianz, other Western insurers consider buying AIG`s Japan units
TOKYO, Oct. 4 Kyodo - The Allianz Group of Germany and other major Western insurers are considering the purchase of American International Group Inc.'s three life insurance units in Japan, sources close to the matter said Saturday.
On Friday, AIG said it intends to sell American Life Insurance Co., which
operates Alico Japan as its Japanese branch, as well as AIG Edison Life
Insurance Co. and AIG Star Life Insurance Co., both of which are AIG group
firms in Japan.
The sources said Allianz and Aegon N.V. of the Netherlands, which do not have
their own sales networks in Japan, as well as a U.S. investment fund have shown
strong interest in the purchase of Alico Japan, AIG Edison and AIG Star.
Major Japanese insurance companies such as Nippon Life Insurance Co. and Tokio
Marine Holdings Inc. may also study their acquisition because Alico Japan has a
network of sales agencies and a solid system for Internet sales, areas in which
domestic peers are not so strong, the sources said.
AIG has already started to narrow down candidates for the sale by soliciting
bids behind the scenes, they said. Negotiations for the deal are expected to
conclude by the end of this year at the latest, they added.
Alico Japan is expected to be priced at around 2 trillion yen, and AIG Star and
AIG Edison at least 500 billion yen, respectively, the sources said.
Last month, the Federal Reserve said it will lend up to $85 billion to AIG to
skirt bankruptcy, effectively placing it under state control. By the end of
September, AIG tapped into $61 billion of the loan ceiling.
For AIG, which is under pressure to pay back the public funds, ''it has to be a
cash deal'' to sell the three units, a senior official at a major property and
casualty insurer said. ''Companies that can come up with money quickly are
limited.''
A purchase by an alliance consisting of investment funds and insurers is also
an option, the sources said.
AIG founded Alico Japan as the first foreign life insurance company in Japan in
1973. In terms of premium revenues, it ranks fifth in the Japanese life
insurance market.
On Friday, AIG said it intends to sell American Life Insurance Co., which
operates Alico Japan as its Japanese branch, as well as AIG Edison Life
Insurance Co. and AIG Star Life Insurance Co., both of which are AIG group
firms in Japan.
The sources said Allianz and Aegon N.V. of the Netherlands, which do not have
their own sales networks in Japan, as well as a U.S. investment fund have shown
strong interest in the purchase of Alico Japan, AIG Edison and AIG Star.
Major Japanese insurance companies such as Nippon Life Insurance Co. and Tokio
Marine Holdings Inc. may also study their acquisition because Alico Japan has a
network of sales agencies and a solid system for Internet sales, areas in which
domestic peers are not so strong, the sources said.
AIG has already started to narrow down candidates for the sale by soliciting
bids behind the scenes, they said. Negotiations for the deal are expected to
conclude by the end of this year at the latest, they added.
Alico Japan is expected to be priced at around 2 trillion yen, and AIG Star and
AIG Edison at least 500 billion yen, respectively, the sources said.
Last month, the Federal Reserve said it will lend up to $85 billion to AIG to
skirt bankruptcy, effectively placing it under state control. By the end of
September, AIG tapped into $61 billion of the loan ceiling.
For AIG, which is under pressure to pay back the public funds, ''it has to be a
cash deal'' to sell the three units, a senior official at a major property and
casualty insurer said. ''Companies that can come up with money quickly are
limited.''
A purchase by an alliance consisting of investment funds and insurers is also
an option, the sources said.
AIG founded Alico Japan as the first foreign life insurance company in Japan in
1973. In terms of premium revenues, it ranks fifth in the Japanese life
insurance market.
