American International Group (AIG) yesterday said it has inked an agreement to sell its 97.57 percent share in Nan Shan Life Insurance Co (南山人壽) to Ruen Chen Investment Holding Co (潤成投資) for US$2.16 billion in cash.
The move marked the second attempt by the US insurance giant to divest itself of its stake in the local subsidiary after Taiwan rejected its first attempt in August over concerns about the long-term commitment and capital increase capability of the previous suitors, China Strategic Holdings Ltd (中策集團) and Primus Financial Holdings Ltd (博智金融).
“AIG has decided to shift its focus to non-life insurance business in the American market following the global financial crisis,” company assistant general counsel Andrew Borodach told a media briefing in Taipei.
Photo: Reuters
Owing to debt obligations to the US government, AIG no longer has the professional expertise or financial capability to support Nan Shan, which may not grow or flourish under AIG’s continued ownership, Borodach said.
AIG is satisfied with the sale price and confident the new buyer group will meet the review criteria set by the Financial Supervisory Commission.
The commission has also required that the buyers safeguard the rights of Nan Shan employees and policyholders, demonstrate professional management competence and comply with funding rules, especially if Chinese capital is involved.
Established in 1963, Nan Shan is the third-largest local insurer by total premiums, serving 4 million policyholders via 4,100 employees and 33,000 agents in 24 branches and 500 agency offices.
“AIG conducted a fair review before selecting the buyer” who can obtain regulatory approval, Borodach said.
He declined to comment on other buyers or the prices they offered.
Ruen Chen, created for the Nan Shan acquisition, is 80 percent owned by Ruentex Group (潤泰集團), a Taiwan-based conglomerate, and 20 percent owned by Pou Chen Corp (寶成工業), a footwear maker.
Samuel Yin (尹衍樑), chairman of Ruentex Group, whose business interests range from textiles to construction and retailing in Taiwan and China, said Ruen Chen will not sell Nan Shan shares in the next 10 years and could meet new capital needs in the next 10 to 20 years.
“We intend to hire all Nan Shan employees for at least two years and keep their current compensation and benefits intact,” Yin said. “We also will keep the Nan Shan brand and maintain the existing agency’s organizational and commission structure.”
Ruen Chen will not make a big reshuffle of the management team, but was recruiting a new chairman and president, Yin said.
The tycoon said that Ruentex and Pou Chen derive their funds from Taiwan, although both firms own businesses in China.
Ruen Chen has a paid-in capital of NT$2.5 billion (US$85.8 million) and the board has approved raising its capital to NT$60 billion.
Tu Ying-tzyong (杜英宗), chairman of Citigroup Global Markets Taiwan Ltd (花旗環球財務管理顧問), which consulted with Ruen Chen on the acquisition, said the consortium would sell Nan Shan shares on the local bourse to raise additional funds.
Borodach said if AIG leads the initial public offering (IPO), the proceeds would go to debt payments in the US, but they would stay with Nan Shan to strengthen its financial strength if the new buyer conducts the IPO plan.
The Financial Supervisory Commission issued a brief statement last night, saying it would soon put together an ad hoc panel to screen the share transfer application.
The review, however, should start with an investment committee under the Ministry of Economic Affairs, the commission said.
The nation’s three largest financial holding firms, Cathay Financial Holdings Co (國泰金控), Fubon Financial Holding Co (富邦金控) and Chinatrust Financial Holdings Co (中信金控), all entered the bidding, but failed.
Another consortium comprised of Primus Financial and Goldsun Development and Construction Co (國產實業), which offered to jointly run Nan Shan with AIG, also failed.
Typhoon Usagi yesterday had weakened into a tropical storm, but a land warning issued by the Central Weather Administration (CWA) was still in effect in four areas in southern Taiwan. As of 5pm yesterday, Tropical Storm Usagi was over waters 120km south-southwest of Oluanpi (鵝鑾鼻), the southernmost tip of Taiwan proper, and was moving north at 9kph, CWA data showed. The storm was expected to veer northeast later yesterday. It had maximum sustained winds of 101kph, with gusts of up to 126kph, the data showed. The CWA urged residents of Kaohsiung, Pingtung County, Taitung County and the Hengchun Peninsula (恆春) to remain alert to
ONE LAST TALK: While Xi said that Taiwan was a ‘red line,’ Biden, in what is likely his last meeting with Xi as president, called for an end to China’s military activity around Taiwan China’s military intimidation and economic coercion against Taiwan are the main causes of tensions that are destabilizing peace in the Taiwan Strait, Taipei said yesterday while thanking US President Joe Biden for expressing Washington’s firm stance of maintaining peace and stability in the region. Biden and Chinese President Xi Jinping (習近平) met on Saturday for their third meeting and their first talks in seven months on the sidelines of the APEC forum in Lima, Peru. It was likely Biden’s last meeting as president with Xi. During their conversation, Biden reiterated the US’ opposition to any unilateral change to the “status quo” from either
Taiwan would participate in the 2026 APEC summit to be hosted by China after Beijing promised it would ensure the personal safety of attendees, Taiwanese national security sources said yesterday. The APEC Leaders’ Machu Picchu Declaration announced yesterday said that China would host the APEC summit in 2026. Beijing proposed hosting the summit shortly before this year’s gathering began on Friday, a national security official said, speaking on condition of anonymity. Many APEC members expressed concerns about China hosting the event and said that prior communication over the decision was insufficient, the official said. Taiwan brought up concerns about legal “guidelines” China announced in
MEET AND GREET: The White House, which called the interaction ‘just a handshake,’ did not immediately respond to a request for comment on whether Biden planned to visit Taiwan’s envoy to the APEC summit, Lin Hsin-i (林信義), on Friday invited US President Joe Biden to visit Taiwan. During the APEC Leaders’ Informal Dialogue, Lin, who represented President William Lai (賴清德) at the summit, spoke with Biden and expressed gratitude to the outgoing US president for his contribution to improving bilateral ties between Taipei and Washington over the past four years, the Ministry of Foreign Affairs said. Lin and Biden exchanged views during the conversation, with Lin extending an invitation to Biden to visit Taiwan, it said. Biden is to step down in January next year, when US president-elect Donald Trump is
RSS