Bailed-out insurance giant AIG raised $17.8 billion in an initial public offering of its AIA Asian life insurance business, Bloomberg reports. The IPO marked the largest capital raise in the history of the Hong Kong stock exchange — one of the rare moments in recent memory when AIG set any kind of record for doing something positive.
AIG had previously tried to offload AIA to rival insurer Prudential for $35.5 billion, but the deal was scuppered after Prudential’s shareholders balked at the price tag. Today’s IPO values the company at $30.6 billion at the final price, Bloomberg says. AIG has the right to sell an additional 1.05 billion shares, a move that would lower AIG’s stake in AIA to 33 percent.
The AIA IPO is an important step in AIG’s process of selling assets to raise cash and pay back the bailout fund engineered by the U.S. government to keep the company from going under at the height of the financial crisis.
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The benefits of life insurance therefore
include the provision of protection to one’s family especially at the
early stage of family life, the obligation for the costly tertiary
education for one’s children, forced savings for one’s own retirement
and avoid burdening one’s family of the inevitable last expenses one
required when they leave this world. Hence, indeed, the benefits of life
insurance and the understanding of its concepts are too wide reaching
to be ignored.
Life Insurance is an essential element in Financial Planning.