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AIG’s Nan Shan Life Receives Low Bids

Sale in doubt as three bidders offered less than $1.5 billion each for the unit, too less than the $2 billion expected by AIG

AIG’s plan to sell its Taiwan unit has taken a blow as three bidders offered less than $1.5 billion each for the unit, too less than the $2 billion expected by AIG – reported Reuters.

Primus Financial and Taiwan’s Cathay Financial have already submitted bids for AIG’s Nan Shan insurance unit, offering less than $1.5 billion. Carlyle Group and Taiwan’s Fubon Financial also stand in the race.

It is likely that AIG might find a buyer this time for Nan Shan, as a result, it would have to negotiate with the potential buyers or have another bidding round. Few months back, a dozen companies had come forward for the Nan Shan bid. Ultimately, four consortiums were selected by AIG to take part in the second round of bidding which were Carlyle-Fubon, Bain Capital-Chinatrust Financial, Cathay Financial, and Primus-China Strategic.

The expensive bidding cost and pension disputes with Nan Shan’s union could once again check AIG’s decision to sell the Taiwan unit.

Last October, Holland’s ING Groep had sold its insurance unit to Fubon, while Britain’s Prudential sold most of its Taiwan assets to Taipei-based China Life earlier this year.