A consortium of Chinese sovereign wealth fund and China Life Insurance is looking to acquire the Asian assets of the recently bailed out US insurance and financial service giant American International Group (AIG), which is expected to have struck some deals for selling parts of its assets.

The Chinese investors are in talks to buy a 49 per cent stake in the AIG unit Alico, in a deal that could be worth as much as $10.6 billion, media reports said.

AIG will also remove its name from its California-based auto insurance unit, aigdirect.com, and cut 6.6 per cent of jobs there to improve chances of finding a buyer for the operation.
 
From January 2009, aigdirect.com will remove `AIG' from its name and revert to  `21st Century Insurance', its original name before its acquisition last year.

The AIG unit, which had a total of 5,000 employees, was also expected to close offices in 12 cities and cut 6.6 per cent of its employees, to make itself more presentable to a buyer.

Beijing-based China Life is reported to be interested in parts of AIG's business in areas such as Hong Kong, Singapore and South Korea.

Chinese media quoted China Life president Wan Feng as saying that the quality of AIG's insurance business in Asia was good but needed further observation, since AIG's financial condition might worsen.

AIG, which received a $152 billion bailout from the US government to avoid bankruptcy, is putting its nonessential businesses up for sale.

AIG expects to conclude talks with the consortium led by the Chinese sovereign wealth fund and China Investment Corporation by the year-end.

Alico, or American Life Insurance Company, has operations in more than 55 countries and has a major presence in Japan. AIG, reports said, was considering a sale on the condition that it could keep more than 50 per cent of voting rights in the company.

Another unit of AIG, American International Assurance, or AIA, is one of the biggest life insurers in Southeast Asia, with operations in China, Australia, India, Japan, Singapore and Korea. AIA China, wholly owned by AIG, is the country's oldest and biggest foreign life insurer.