Prudential buy AIG’s Asia arm

It seems that Prudential (NYSE:PRU) have agreed to buy AIG’s (NYSE:AIG) Asian life insurance arm for $35.5 billion (£23.6 billion). The deal will make Prudential the leader in one of the world’s fastest-growing financial services markets.

The deal will be financed by a $20 billion equity capital raising plus a $5 Billion debt issue according to Prudential. The $20 billion will be one of the largest cash calls in the world. Prudential’s shares however tumbled 11.5 percent to 532 pence after trading resumed after an earlier suspension on Monday.

According to ING analyst Kevin Ryan who said “No one knows exactly what AIA contains or how profitable it is.” The takeover of AIA will make Prudential Asia’s biggest foreign insurer, boosting the company’s appeal to investors. Prudential is already among the top foreign insurers in Asia.

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