AIG set to launch Prudential bid

Published on Monday 19 July 2010 16:07

BAILED-out American insurance giant AIG is expected to turn the tables on the Prudential and launch a bid for some or all of the UK insurer following an IPO of its Asian business, analysts have said.

Mark Tucker, the former chief executive of Prudential, has been recruited by AIG to run AIA, sparking expectation that the group will move to acquire Pru's own Asian business. Last month, Tucker's successor at Prudential's, Tidjane Thiam, failed to win investor support of its $35.5 billion (23bn) bid for AIA after the American group refused to sell for a lower price.

Tucker, who was chief executive Prudential for four years, spent 15 years in Asia building its business there.

Analysts yesterday said Tucker's appointment signalled the American insurer would look to take control of Pru's Asian division following its flotation on the Hong Kong stock exchange this year.

"Tucker would dearly love to get Pru Asia and if it that happened through a bid for the whole group then break it up, so be it," said Eamonn Flanagan, an insurance analyst with Shore Capital.

"He knows that business like the back of his hand," he added.

But sources close to Prudential played down AIG's financial strength. The American business needs to raise cash in a bid to repay the group's $182.3bn bailout by the US government.

Robert Benmosche, the AIG chief executive officer, said the unit's public offering would be "ready to go in the coming months when market conditions are optimal".

Tucker will replace Mark Wilson. AIA has more than 23 million customers and offices in 15 countries.