AIG reduces AIA valuation

4 October 2010

AIG has lowered the valuation of its Asian unit AIA in order to secure investment in its initial public offering (IPO) in the company.

It has intended to sell shares in the division at a price which valued it at between $35 billion and $37 billion, but has now dropped this to a level ranging between $30 billion and $32 billion, insider sources told the Financial Times.

The Kuwait Investment Authority is now reported to have signed up for a $1 billion commitment to the IPO at the new lower price, while other large backers have also become cornerstone investors in AIA.

BlackRock and Capital Group are said to be in talks with AIG about investing in the IPO.

Shares in the unit are to be priced and allocated on October 21st, with the listing going ahead in Hong Kong on October 29th.

Last month, AIG outlined its plans to fully repay the US government for the bailout money it has received since the beginning of the financial crisis.

By Asim Shah

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