Prudential close to agreement with FSA
It is believed that the Prudential is close to announcing an agreement with the FSA which would allow the group to continue with the much-publicised £24 billion acquisition of AIG's Asian operations. The deal appeared to be in turmoil after the FSA requested more time to look through various capital adequacy requirements for the enlarged group. This caused confusion and concern within investment markets and the postponement of a £14 billion fundraising exercise.
It now appears as though the FSA and the Prudential have come to an agreement which will see the creation of a reserve worth in the region of £1 billion which would be used in a "Armageddon situation". One of the major concerns of the FSA had been the ability for the Prudential to withdraw funding from Asia if required by the UK regulator in the event of any seen circumstances. Now that this situation appears to have been resolved, hopefully we should get back to the subject of the deal at hand this week.
If these rumours are correct then this could be the lifeboat that the Prudential management have been looking for after coming under massive pressure over the last seven days.
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