AIA Share Price

AIA, the Asian life insurance unit of American International Group, rose 17 percent in its first day of trading in Hong Kong on Friday, its closing share price of 23.05 Hong Kong dollars valuing the company at $35.8 billion, well above the bid made this year by Prudential Plc.

Spinning off AIA in Hong Kong’s largest I.P.O. has been a coup for A.I.G., both financially and politically, as the bailed-out insurer takes another step toward paying down the $182 billion spent on its rescue and makes up for time lost on the collapsed deal to sell AIA to Prudential of Britain.

A.I.G. said last week that it had priced the issue at the top of its range, at 19.68 Hong Kong dollars, or $2.53, raising $17.8 billion for the company, and by extension, for U.S. taxpayers.

At the end of the day, it could raise up to $20.5 billion if it exercises its right to sell more shares within a month of the initial public offering — a so-called overallotment option that can take advantage of a rising share price.

By selling the maximum number of shares, A.I.G. would reduce its stake in AIA from 58 percent to 33 percent, just one move in its broad, albeit not total, retreat from Asia.

A.I.G. is also selling its two Japanese life insurance businesses, A.I.G. Star Life Insurance and A.I.G. Edison Life Insurance, to Prudential Financial, and is also attempting to divest a Taiwan unit, Nan Shan, amid regulatory hurdles.

AIA’s public offering is the second blockbuster I.P.O. in Hong Kong this year, following the $22.1 billion flotation of Agricultural Bank of China, which shared the issue with Shanghai.

AIA is headquartered in Hong Kong, conducting operations in 15 countries through 23,500 employees and more than 300,000 agents. The company foresees a pre-tax profit this year of $2 billion.

Related posts: