Prudential counts the cost of failed AIA bid

British insurance giant Prudential has said the cost of its failed bid for AIA, the Asian arm of US company American International Group (AIG), is £377 million before tax relief.

However, it is less than originally thought. Following the collapse of the deal, Pru said it faced costs of £450 million relating to the withdrawal of the deal, which included a break-up fee of £152.6 million.

In early June, Prudential abandoned its $35.5 billion takeover of AIA after the insurer had attempted to renegotiate an earlier deal and offered a lower price tag of $30.375 billion, which AIA snubbed.

At the time, several Prudential shareholders said they would not approve the takeover unless the Pru trimmed between $3 billion and $5 billion from the original price.

The deal was set to provide the Pru with the opportunity to create South East Asia’s leading insurer.

Meanwhile, the cost of the failed bid comes as the Pru announced a 34% rise in first-half operating profit of £1.68 billion.

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Prudential has no plans for renewed AIA bid

 

British insurance giant Prudential has today said it has no plans for a renewed bid for AIA, the Asian arm of US company American International Group (AIG).

The statement came after media reports today suggested that a fresh takeover deal was in the pipeline.

Chad Tendler, Prudential’s Hong Kong-based spokesperson, told Reuters: “We remain highly committed to Asia through our current very successful business. We will not be resurrecting the AIA deal and any speculation is misguided and inaccurate.”

Last Wednesday, Prudential abandoned its $35.5 billion (£24.6 billion) takeover of AIA after the insurer had attempted to renegotiate the deal and offered a lower price tag of $30.375 billion, which AIA snubbed.

Several Prudential shareholders had already said they would not approve the takeover unless the Pru trimmed between $3 billion and $5 billion from the original price.

The failure of the deal has raised fears about the future of Prudential chairman, Harvey McGrath, and the insurer’s chief executive, Tidjane Thiam.

Following the collapse of the deal, Pru said it faced costs of £450 million ($653 million) relating to the withdrawal of the deal, which includes a break-up fee of £152.6 million.

The deal was set to provide the Pru with the opportunity to create South East Asia’s leading insurer.

However, today Prudential, which is Britain’s second largest insurer, said: “We remain highly committed to Asia through our current very successful business.”

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Prudential Q3 sales exceed expectations

 

British insurance giant Prudential has today announced profits grew 17% in the third quarter – driven by higher sales at its Asian and US markets.

The results were better than expected and sent its shares up 0.6% in early morning trading.

The insurer, which is Britain’s largest, said it has focused its attention on expanding in the fast-growing Asian market.

Meanwhile, revenue increased to £809 million in the three month period from £689 million in the same period a year ago – beating expectations of £773 million.

Meanwhile, the company’s US division, Jackson National Life, reported a 16% increase in sales in the three months to September to £290 million.

Today’s figures will be a boost after the Pru recently had to count the cost of its failed bid for AIA, the Asian arm of US company American International Group (AIG).

In early June, Prudential abandoned its $35.5 billion takeover of AIA after the insurer had attempted to renegotiate an earlier deal and offered a lower price tag of $30.375 billion, which AIA snubbed.

At the time, several Prudential shareholders said they would not approve the takeover unless the Pru trimmed between $3 billion and $5 billion from the original price.

The deal was set to provide the Pru with the opportunity to create South East Asia’s leading insurer.

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