SINGAPORE • American International Group Inc (AIG) has exited its stake in The People’s Insurance Co (Group) of China Ltd (PICC Group), raising US$482 million (RM1.96 billion) in the process.
The New York-based insurer sold 1.11 billion shares in PICC Group at HK$3.40 (RM1.76) each, near the bottom of the marketed range, according to terms for the deal obtained by Bloomberg.
AIG had earlier offered the stock at HK$3.39 to HK$3.43 apiece, and the final price represents a 5% discount to PICC Group’s last close on Wednesday.
AIG CEO Brian Duperreault has been working to turn the beleaguered US insurer around and restore investor confidence.
Pain from old policies and volatile markets fuelled its second straight surprise loss in the fourth quarter, a sign that a turnaround remains challenging.
AIG’s sale of its entire stake in PICC Group will remove the overhang on the latter’s share price, Bloomberg Intelligence insurance analyst Steven Lam said.
“The impact to PICC Group’s life insurance business should be minimal, as it has a much stronger distribution network today compared to when it was listed in 2012,” he said.
The deal was equivalent to about 12.8% of PICC Group’s existing Hong Kong-traded shares. The stock was trading 1.4% lower yesterday.
Shares in AIG are up 10.3% since January after tumbling 34% in 2018. — Bloomberg