<p>Australia, New Zealand, South Korea and Taiwan are four markets Prudential may decide to leave due to low market share, sources said. One source said asset sales could potentially top $1 billion. Prudential’s planned acquisition of Hong Kong-based American International Assurance, AIG’s Asia life insurance group, still has some way to go before it closes.<br /><br />The deal is a transformative one, the largest-ever in the insurance industry, and one that that will immediately change Asia’s insurance industry landscape.<br /><br />“You can bet that a lot of strategic players and financial buyers are already positioning themselves for the coming activity,” one of the sources said, referring to the potential divestments that could come from the combination.<br /><br />On Friday, Prudential said Singapore sovereign wealth fund GIC and Qatar Holding had committed to underwriting a significant portion of its planned $20 billion rights issue that will help fund the AIA deal.<br /><br />Prudential is buying AIA as it bets on soaring demand in Asia for personal financial services. The move also allows it to swallow a top competitor that had planned to spin-off on its own from AIG through a $10-$20 billion Hong Kong IPO.<br /><br />In South Korea, Prudential-AIA would rank No 5 in terms of market share, while in Australia, it would have just 0.5 per cent market share, ranked 14th, according to a person working on the transaction. In New Zealand, they would rank sixth.<br /><br />Prudential India biz<br /><br />Prudential has a joint venture in India with ICICI, a partnership that is much bigger than AIG’s link-up with India’s Tata Group. Tata is expected to buy out AIG’s 26 percent stake or find another partner as Prudential would not be allowed to have two joint ventures in the same country.<br /><br />Prudential-AIA may face a similar situation in China, where foreign companies are not allowed to have more than one joint venture partner. Citic-Prudential Insurance is a 50-50 joint venture with a 0.5 per cent share of China’s market. AIA in China is 100 per cent-owned by AIG, with a 1 percent market share. While both shares are small, China is viewed as a key growth market for the combined company.<br /></p>
<p>Australia, New Zealand, South Korea and Taiwan are four markets Prudential may decide to leave due to low market share, sources said. One source said asset sales could potentially top $1 billion. Prudential’s planned acquisition of Hong Kong-based American International Assurance, AIG’s Asia life insurance group, still has some way to go before it closes.<br /><br />The deal is a transformative one, the largest-ever in the insurance industry, and one that that will immediately change Asia’s insurance industry landscape.<br /><br />“You can bet that a lot of strategic players and financial buyers are already positioning themselves for the coming activity,” one of the sources said, referring to the potential divestments that could come from the combination.<br /><br />On Friday, Prudential said Singapore sovereign wealth fund GIC and Qatar Holding had committed to underwriting a significant portion of its planned $20 billion rights issue that will help fund the AIA deal.<br /><br />Prudential is buying AIA as it bets on soaring demand in Asia for personal financial services. The move also allows it to swallow a top competitor that had planned to spin-off on its own from AIG through a $10-$20 billion Hong Kong IPO.<br /><br />In South Korea, Prudential-AIA would rank No 5 in terms of market share, while in Australia, it would have just 0.5 per cent market share, ranked 14th, according to a person working on the transaction. In New Zealand, they would rank sixth.<br /><br />Prudential India biz<br /><br />Prudential has a joint venture in India with ICICI, a partnership that is much bigger than AIG’s link-up with India’s Tata Group. Tata is expected to buy out AIG’s 26 percent stake or find another partner as Prudential would not be allowed to have two joint ventures in the same country.<br /><br />Prudential-AIA may face a similar situation in China, where foreign companies are not allowed to have more than one joint venture partner. Citic-Prudential Insurance is a 50-50 joint venture with a 0.5 per cent share of China’s market. AIA in China is 100 per cent-owned by AIG, with a 1 percent market share. While both shares are small, China is viewed as a key growth market for the combined company.<br /></p>