AIG hires Citigroup for Asian life insurance arm AIA's IPO

NEW YORK: US insurer American International Group (AIG) has selected financial services major Citigroup as one of the global coordinators for an initial public offering of its Asian life insurance unit AIA, says a media report.

"AIG has added Citigroup to the list of global coordinators for the listing of a stake in its largest overseas life insurance business," The Wall Street Journal reported, citing a person familiar with the matter.

The insurer, which is majority-owned by the US government, has also enlisted Goldman Sachs Group Inc, Morgan Stanley and Deutsche Bank AG to advise it on the initial public offering of AIA Group Ltd, the pan-Asian life insurer AIG must sell to help repay US taxpayers, the report noted.

The IPO is understood to raise about USD 15 billion. The issue is expected to list in Hong Kong by the fourth quarter.

According to analysts, the main concern for the banks would be how to minimise the risk of tapping investors for capital when the outlook for equity valuations is so uncertain.

AIG's management is especially keen on avoiding hiccups after Prudential Plc's USD 35.5 billion bid for AIA collapsed in June.

One way to minimise risk is to sell shares offered in the issue in large chunks to cornerstone investors ahead of the IPO.