AIG Sells Taiwan Life Unit For $2.15 Billion

NU Online News Service, Oct. 13, 10:13 a.m. EDT

American International Group Inc. announced it has arranged to sell Taiwan-based Nan Shan Life Insurance Company Ltd. for approximately $2.15 billion to a consortium led by Primus Financial Holdings Ltd.

AIG has a 97.57 percent share in Nan Shan. Primus is a Hong Kong-based financial services firm. Also in the purchasing consortium is China Strategic Holdings Ltd., a Hong Kong Stock Exchange-listed investment company.

The sale is AIG's largest divestment to date since it began selling off properties to repay the government for billions in bailout money in exchange for a 79.9 percent stake in the company.

In June, AIG arranged to sell its Personal Auto Group, the 21st Century Insurance Group, which consists of a total of 18 insurance companies, for $1.9 billion to Farmers Group, a subsidiary of Zurich Financial Services.

AIG said last week that of the $182.3 billion in government authorized assistance it has secured, it has used $83.6 billion. An AIG spokesman said today that the company would not comment on how the proceeds from the Nan Shan sale would be applied.

Robert Benmosche, AIG's chief executive officer, in a statement announcing the sale, said the company is "pleased to have found a buyer who shares our confidence in Nan Shan's bright future, and who has pledged to continue Nan Shan's commitment to its policyholders, agents and employees, as well as to the people of Taiwan."

In acquiring Nan Shan, the Primus Financial consortium has agreed to maintain the Nan Shan brand, the existing compensation and benefits package for employees, as well as the existing agency organizational and commission structure for a minimum of two years following the closing of the transaction.

The current Nan Shan management team will remain in place, AIG said.

Nan Shan is the largest life insurer in Taiwan by total book value and the third largest by total premiums, serving four million policyholders.

The company lists 24 branches, 450 agency offices, approximately 4,000 employees, and more than 34,000 agents. It was created in 1963.

AIG said Blackstone Advisory Partners and Morgan Stanley acted as financial advisors and Debevoise & Plimpton LLP and Lee & Li, Attorneys-At-Law served as legal advisors for the transaction.

Lead legal advisor for the Primus consortium was Simpson Thacher. The law firm said it has a global team of attorneys working on the transaction from the offices in Hong Kong, Beijing, New York, Palo Alto, Calif. and London.