Prudential lays down the law to AIG
UK insurer Prudential and American outfit AIG are day locked in talks regarding the proposed sale of the company's Asian operations. In what many see as the ultimate game of poker, the two companies are currently positioned around a table with the US government also heavily involved in the talks. While many shareholders in Prudential agree the move is a logic step for the future there has been some concern regarding the US$35 billion price tag.
There is no doubt that the talks are balanced on a knife edge with Prudential looking to improve shareholder support for the move while also looking to reduce the price. On the other hand, AIG, now effectively controlled by the US government, is desperate to realise the Asian assets and return money to US taxpayers. So in many ways Prudential is holding the upper hand at the moment but the Prudential management needs to appreciate and balance the cost of the acquisition, shareholder concerns and ultimately the strategic direction of the company in the future.
This saga has been ongoing for some time now although slowly but surely we are nearing the endgame. However, who will ultimately win is unclear at this moment in time.
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