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AIA sets date for 15 billion US dollar Hong Kong IPO: report

China pact lures foreign investors to Taiwan
Taipei (AFP) Sept 21, 2010 - Some of the world's biggest firms were among almost 30 foreign groups vowing major investments in Taiwan amid growing interest in the island since it signed a trade pact with China, officials said. Qualcomm and GlaxoSmithKline joined 25 other firms from Japan, Europe and the United States to sign letters of intent to spend over 100 billion Taiwan dollars (3.2 billion US) in total in two years, the economic ministry said. The proposed investment projects became feasible after Taiwan signed the historic Economic Cooperation Framework Agreement (ECFA) with China in June, according to the ministry.

"The signing of the ECFA will not only benefit Taiwan and China, but has also made Taiwan attractive to investors from the world," economic minister Shih Yen-hsiang said Tuesday. If realised, the investment projects will create up to 13,000 jobs, he said. Among the projects, Hewlett-Packard Co. plans to invest 3.6 billion Taiwan dollars in the establishment of a research and development unit, the ministry said.

The landmark ECFA, which took effect in mid-September, conferring preferential tariffs on Taiwan and China, is the most sweeping pact ever penned by the two sides. It has been widely characterised as the boldest step yet towards reconciliation between the former rivals, who split after the end of a civil war in 1949. Taiwan's ruling Kuomintang party has hailed the agreement, saying it will bolster the island's economy, but the anti-China Democratic Progressive Party and its allies claim it will undermine its de facto independence. Although Taiwan and China have been governed separately for more than six decades, Beijing considers the island part of its territory and has vowed to get it back, by force if necessary.
by Staff Writers
Hong Kong (AFP) Sept 21, 2010
AIA, the Asian unit of troubled US insurer AIG, will launch a 15 billion US dollar share sale on October 29 in what could be the world's second-biggest stock offering this year, reports said Tuesday.

The insurer was seeking approval from Hong Kong's bourse on Tuesday with plans to set a price range next week, the Wall Street Journal and Financial Times reported, both citing unnamed sources.

If approved on Tuesday, AIA will start investor presentations on October 6, the Journal reported.

AIA is also hoping to sign an agreement next week with so-called cornerstone investors -- generally institutional buyers -- who could pick up as much as one-fifth of the offering, the Financial Times said.

AIG, which owes billions of dollars in US government bailouts, was forced to look again at the option of publicly floating AIA in Hong Kong after the collapse in June of Prudential's 35.5-billion US dollar takeover bid.

Chinese insurance companies and some of China's largest banks are said to be looking at both taking stakes and financing others, according to the Financial Times.

In July, Hong Kong's South China Morning Post newspaper reported that at least four consortia made up of private Chinese investors had approached AIG about buying its Asian business.

Sovereign wealth funds had also expressed an interest in AIA, including Singapore's GIC and Temasek, as well as funds in Abu Dhabi, Kuwait and Qatar, the Financial Times said.

Agricultural Bank of China claimed the world's biggest IPO in August when confirming it had raised 22.1 billion US dollars, after its shares debuted in Hong Kong in July.

The monster sale beat the previous world record set by the Industrial and Commercial Bank of China, which raised 21.9 billion dollars in 2006.

earlier related report
AIG mulling options for Taiwan unit after aborted deal
Taipei (AFP) Sept 21, 2010 - US insurance giant American International Group said Tuesday it was considering other options after collapse of the sale of its Taiwan unit to a Hong Kong consortium.

The Hong Kong-listed China Strategic Holdings on Monday formally called off its high-profile acquisition of Nan Shan Life Insurance Co from AIG for 2.15 billion US dollars.

"AIG is evaluating its options with respect to its ownership of Nan Shan," AIG said in a statement, without providing details.

China Strategic's decision came after Taiwan's Investment Commission last month rejected an application by China Strategic Holdings and its partner Primus Financial Holdings for the acquisition of Nan Shan.

The duo were invited to appeal, but they have not done so.

Taiwan authorities said they feared the consortium lacked the experience needed to manage an insurer and argued it had failed to provide a long-term management commitment, claims flatly rejected by the Hong Kong consortium.

The rejection of the bid came as a blow to AIG, once the world's largest insurer, which has been selling assets to pay back US government loans since its rescue from collapse during the 2008 financial crisis.

AIG and its Hong Kong buyers struck the deal in October last year, but it has been in limbo as Taiwan authorities have screened it.

Rumours surfaced late last year that mainland Chinese capital was involved in the deal. The consortium has repeatedly denied the rumours.

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