AIG says It was offered $3 bn for Taiwan's Nan Shan Unit

American International Group Inc, the insurer selling assets to repay a US bailout, told regulators it was offered as much as $3 billion for its Taiwan- based unit Nan Shan Life Insurance Co.

“Prospective buyers have approached AIG and have provided unsolicited letters of interest in purchasing Nan Shan at prices that range from $2.15 billion to $3.0 billion,” the New York- based insurer said in a November 12 letter to the Securities and Exchange Commission that was released yesterday by the regulator. AIG didn’t name the bidders in the letter.

Cathay Financial Holding Co and Fubon Financial Holding Co, which own Taiwan’s two biggest insurers, are among bidders seeking AIG’s 4 million customers and more than 500 outlets on the island. AIG disclosed the bidding interest in response to SEC queries after Taiwan regulators blocked a $2.15 billion sale in August.

 

“The priority for AIG now is to sell non-core assets to raise funds to repay the Treasury and to exit the Taiwan insurance market, which is lossmaking,” said Stanley Tsai, a Hong Kong-based analyst at Keefe Bruyette & Woods Asia. “Taiwan is overbanked and the insurance industry is over-serviced. A lot of foreign insurers have exited the Taiwan market.”

Taiwan Secom Co said yesterday it plans to form a group with Goldsun Development & Construction Co. and Primus Financial Holdings to bid for Nan Shan. Cathay Financial, Chinatrust Financial Holding Co, Fubon Financial and a group led by Ruentex Group submitted bids for Nan Shan on December 3.

AIG’s plan to sell the unit stalled when Taiwan’s Financial Supervisory Commission on August 31 rejected a $2.15 billion bid.