AIG sells Taiwan subsidiary to Primus for $2.15 bn

NEW YORK: Insurer American International Group Inc. said late Monday it has agreed to sell its nearly 98 percent stake in Taiwan unit Nan Shan to an investor group led by Hong Kong's Primus Financial for about $2.15 billion.

Nan Shan, which serves more than 4 million life insurance policy holders in Taiwan, is the third-largest life insurer in the country by total premiums. Established in 1963, it operates a network of 24 branches and 450 agency offices.

The Primus consortium, which also includes investment firm China Strategic Holdings Ltd., will maintain the Nan Shan brand. It also has agreed to retain existing compensation and benefits packages for Nan Shan's 4,000 employees and the agency's organizational and commission structure for at least two years after the deal closes. The current Nan Shan management team will remain in place.

When the credit crisis hit last year, the U.S. government rescued New York-based AIG with a loan bailout package worth up to $182.5 billion in exchange for 80 percent ownership of the huge insurer. AIG is shedding assets in an effort to repay government aid. In July AIG completed the sale of 21st Century Insurance Group, part of its personal auto insurance division, to Farmers Group Inc. for $1.9 billion.

AIG said Blackstone Advisory Partners and Morgan Stanley acted as its financial advisers and Debevoise & Plimpton LLP and Lee & Li served as legal advisers on this transaction, which is still subject to regulatory approval.