AIG kicks off sale of AIA?

American International Group Inc has kicked off the sale of its Asian life assurance unit in the hope of raising up to $20 billion to help repay a U.S. government loan, the Financial Times reported on Thursday.

The U.S. insurer sent a sales memorandum for American International Assurance to a group of selected potential bidders, the newspaper quoted “people close to the situation” as saying.

AIG declined comment on the report.

The Financial Times said AIA is regarded as a jewel in AIG’s crown. It has 20 million policyholders in 13 countries and last year made an aggregate operating profit of about $2 billion.

Analysts estimate the sale of a minority stake could fetch up to $20 billion, it said.

The newspaper said AIG had sought bids for 49 percent of AIA, but would be willing to look at offers for the entire unit. AIG could also opt for a full listing of the division if it does not achieve a high enough price, the report said.

Prospective bidders include China Life <601628.SS>, HSBC <0005.HK>, British insurer Prudential Plc and U.S. life insurer Prudential Financial Inc , the report said.

Canada’s Manulife Financial and Germany’s Allianz have also requested information, it added.

First-round bids are due towards the end of February, it said.

AIG, once the world’s biggest insurer by market value, averted bankruptcy in September with an $85 billion federal government bailout. The rescue later swelled to about $152 billion.

AIG has said it plans to sell everything except its U.S. property and casualty business, foreign general insurance, and an ownership interest in some foreign life operations.

Source: Yahoo