Sovereign wealth fund CIC could buy 49% of Alico, say reports, launching China into world insurance market
A consortium led by sovereign wealth fund China Investment Corp (CIC) is in talks to buy a 49 percent stake in American Life Insurance Co (Alico), a unit of AIG, according to Japan's Nikkei business daily. AIG is trying to sell off assets to pay back its $152bn bailout loan.
The deal could be worth between $5.3 and $10.6 billion, and could open the way for China to become a major player in the global insurance market.
The paper said AIG was holding preferential talks with the CIC-led consortium, which includes Chinese insurance companies, with a year-end deadline.
A senior official of CIC, a $200 billion sovereign wealth fund, said according to Reuters that China and other developing countries should be given more influence in the global financial system if they provide money to help resolve the world's economic crisis.
Jin Liqun, CIC's supervisory board chairman, also said the fund that manages part of China's nearly $2 trillion of foreign exchange reserves would continue to expand its investment overseas and would not be intimidated by the current global market turmoil.
The Nikkei paper said AIG was considering a sale on condition that it keeps more than 50 percent of voting rights in Alico, which has operations in more than 55 countries.
Based on Alico's business value, the acquisition of a 49 percent stake would likely cost the Chinese investors between 500 billion yen and 1 trillion yen ($5.3-10.6 billion), Nikkei reported.
An AIG spokesman in Japan said the firm was still checking the facts and was not in a position to comment on the report.