AIA, the Asian life insurance arm of AIG, raised $17.9 billion by pricing its Hong Kong IPO at the top of its range as investors piled into the most attractive offering in the world's hottest financial market. The pricing of the initial public offering, set to be the world's third biggest, comes as new listings proliferate in Asia.
It puts an end to a long-running saga for American International Group, which tried and failed to sell AIA to Britain's Prudential earlier this year. AIG plans to use some of the proceeds of the AIA sale to pay back part of the $182.3 billion bailout that it received from the US government during the financial crisis. The successful sale made AIG the top gainer among US insurance shares on Friday, adding more than 2 percent.
AIA said on Friday that the IPO was priced at HK$19.68 each and that it exercised its upsize option. If the underwriters exercise the overallotment option, the IPO size would rise 15 percent to $20.5 billion. AIA's will start trading on October 29. AIA has been in Asia for more nearly a century, and has a forecast pre-tax operating profit of $2 billion.
The IPO will value AIA at $30.5 billion at the top end, with AIG holding a 41.6 percent stake that would drop to 33 percent if it exercises an option to issue more shares. Asian IPOs raised $90 billion in the first three quarters of 2010, more than double the total from the US, Europe, the Middle East and Africa, according to Thomson Reuters.