AIG sale of Taiwan unit rejected

The $2.15 billion deal is derailed because of the buyer's suspected links to China.

By TheStreet Staff Aug 31, 2010 9:39AM

business news from thestreetBy Joseph Woelfel, TheStreet

 

AIG's (AIG) sale of its Taiwanese life insurance unit to Primus Financial Holdings has been rejected by Taiwanese regulators.

 

The sale was held up on concerns that Primus may be backed by funds from China, The Associated Press reports. Reuters says Primus' partner in the deal, China Strategic, was suspected to have connections to China, Taiwan's political foe.

 

Taiwan law prohibits Chinese investment in the financial sector.

 

In October 2009, AIG announced the sale of the Taipei-based Nan Shan Life Insurance to an investor group led by Primus for about $2.15 billion. It's the second time AIG has tried to sell Nan Shan.

Taiwan's vice economics minister, Huang Chung-chiu, said Primus can file an appeal to authorities in 30 days, but he didn't elaborate on the rejection of its application, AP reports.

 

Primus has previously denied having a Chinese sponsor, AP says.

 

Proceeds from the sale of Nan Shan were to be used by AIG to pay back the U.S. government, which bailed out the insurer in 2008.

 

AIG wasn't available for comment.

 

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