AIG plans to spin off Asian arm to repay Treasury money

19 May 2009

In its efforts to repay the Treasury bailout money, the US insurance giant American International Group Inc (AIG) is planning an initial public offering (IPO) of its Asian unit, American International Assurance Co (AIA Group) by spinning it off in to a separate entity.

However, the company has not revealed the name of the exchange or the size of the offering.

''Those details will be based on market conditions and regulatory approval,'' the company said, adding only that  it would accelerate steps to make AIA, an independent entity and also seek IPO on an Asian stock exchange.

Speculations are rife that the Australia-based unit will be listed on the Hong Kong Stock Exchange.

Despite the financial turmoil of the parent, the Asian business is viewed by industry rivals as AIG's crown jewel.

"At this stage, we believe that a public listing for AIA would be in the best interests of all stakeholders, including US taxpayers, policyholders, employees and distribution partners," AIG chairman and chief executive Edward Liddy said in a statement.