Manulife may bid for AIG assets: report

Tue Sep 23, 2008 12:57am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

TORONTO (Reuters) - Manulife Financial is among the global insurers poised to bid for parts of American International Group, a major casualty of the U.S. credit crisis, the Globe and Mail newspaper said on Monday.

Citing sources, the newspaper said Manulife executives, led by Chief Executive Dominic D'Alessandro, had met with financial advisers late last week to consider ways to exploit AIG's probable breakup.

Manulife was not immediately available to comment on the newspaper report.

Other insurers are also potential bidders for AIG assets, but some view Toronto-based Manulife as a more logical suitor as it is a strong player in a weak market, the newspaper said.

Last week, the U.S. Federal Reserve agreed to lend AIG up to $85 billion in exchange for 79.9 percent of its equity.

Given a steep interest rate, there is a big incentive for AIG to embark on a massive asset sale program to pay back the loan quickly, and insurance rivals are set to jostle to pick up attractive parts of the company.

While Manulife could make a quick offer for the whole company, the problem is that the toxin levels in AIG's portfolios are not known, the newspaper said. Buying certain divisions would be far less risky for Manulife or any other bidder.

Analysts say Manulife, the biggest North American insurer by market value, might consider acquiring AIG's U.S. variable annuity business. Also, Manulife executives have said they would like to enter the Japanese and Chinese wealth-management markets.

Analysts say AIG's crown jewels are its Asian operations and the group pension business in the United States, the newspaper said.   Continued...