Prudential abandons AIA deal
Prudential has confirmed that it will not complete the $35.5bn deal
Prudential has abandoned plans to takeover AIA after the UK
insurer failed to negotiate a cut-price deal.
In March, Prudential agreed to buy Asian insurer AIA, a branch
of AIG, for $35.5 billion (£25 billion) but was forced to try and
reduce the price following shareholder opposition.
Many investors felt the deal was too expensive and planned to
vote against the proposed move in a ballot held in June.
AIA refused to accept a reduced $30 billion offer, claiming that
it would not consider any change in the terms of the deal.
Prudential chairman Harvey McGrath said: "We listened carefully
to shareholders over the price and initiated a renegotiation of the
terms with AIG.
"Unfortunately, it has not been possible to reach agreement...
we are therefore withdrawing from the transaction."
The firm stands to lose around £450 million in costs relating to
the deal, including a penalty charge of £152 million for breaking