AIG raises $17.85 billion, prices AIA IPO at top: sources

By Denny Thomas and Kennix Chim

HONG KONG (BestGrowthStock) – AIA, the Asian life insurance arm of American International Group Inc. (AIG.N: ), raised $17.85 billion by pricing its Hong Kong IPO at the top end an indicated range, sources with direct knowledge of the matter told Reuters on Friday, a deal that saw heavy demand from funds seeking a piece of one of the region’s best known industry brands.

The pricing of the IPO puts an end to AIG’s long-running effort to sell the AIA business, a process that began roughly two years ago. British insurer Prudential plc (PRU.L: ) tried and failed to purchase AIA earlier this year.

The IPO will value AIA at $30.5 billion at top end and AIG will continue to hold 41.6 percent. AIG’s stake will drop to 33 percent if it exercises the green-shoe option in full.

AIA sold 5.86 billion secondary shares at HK$19.68 each compared with a range of HK$18.38 to HK$19.68, the sources said. The company also exercised the upsize option to sell an additional 1.17 billion secondary shares, due to strong demand from investors.

Sources declined to be identified as AIG was yet to make the decision public. An AIA spokeswoman was not available for an immediate comment.

A Reuters poll released last week forecast AIG to sell shares at HK$19.14 each.

AIG will use the IPO proceeds to pay back part of the bail out package it received from the U.S. government during the 2008 financial crisis.

The IPO is on course to be the third-biggest ever globally, if AIG decides to exercise the green-shoe option.

AIA’s trading debut is set for October 29, under the symbol

“1299” (1299.HK: ).

AIA’s unique position as the only listed life insurer with a wide foot print in the rapidly growing Asia Pacific region is a big draw for investors, fund managers said.

The company operates in 15 markets in Asia. Unlike many other foreign insurers, AIA has 100 percent ownership of its entities in China, Indonesia, Malaysia, Thailand and Vietnam. AIA has more than 300,000 agents in Asia.

Citigroup Inc. (C.N: ), Deutsche Bank AG (DBKGn.DE: ), Goldman Sachs Group Inc (GS.N: ) and Morgan Stanley (MS.N: ) (Read more about the money market today. ) are joint global coordinators for the IPO.

Other banks involved in the offering include Bank of America Merrill Lynch (BAC.N: ), Barclays, Credit Suisse (CSGN.VX: ), JP Morgan (JPM.N: ), UBS (UBSN.VX: ), ICBC International and CIMB.

(Reporting by Denny Thomas and Kennix Chim; Additional reporting by Phil Wahba in NEW YORK; Editing by Michael Flaherty)

AIG raises $17.85 billion, prices AIA IPO at top: sources