AIG to List AIA Next Month: Report

AIG plans to list its Asian life insurance unit next month, according to a report.
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HONG KONG (

TheStreet

) --

American International Group

(AIG) - Get Report

plans to list its Asian life insurance unit next month, according to a report, but may not raise as much in capital as a deal that AIG's board rejected.

For several months, AIG has been trying to divest its AIA Group unit at a reasonable price. According to

Reuters

, the insurer plans to list AIA on the Hong Kong stock exchange on Oct. 29, targeting a $15 billion IPO.

The sum comes in stark contrast to a proposed deal with Prudential PLC earlier this year. Prudential had offered $35 billion for AIA, a sum which its shareholders rejected as too rich. When Prudential came back with a revised $30.4 billion offer, AIG's board rejected it as too cheap - leading to a battle with CEO Robert Benmosche, who disagreed and threatened to quit.

It's unclear how much of a stake AIG will retain in AIA. According to the news report, which cited anonymous sources, the insurer would like to sell as much as possible.

Reuters

indicated that a $30.4 billion IPO was "at the top end" of potential outcomes.

AIG is selling AIA Group in an effort to divest noncore assets and repay roughly $70 billion in debt to the federal government. It aims to raise another $15.5 billion through a unit sale to

MetLife

(MET) - Get Report

, which is expected to close in the second half of this year.

But the Asian markets have been flooded with offerings recently, including Agricultural Bank of China, which raised more than $22 billion in the world's largest IPO. Asian insurance IPOs alone have already raised $16 billion this year, indicating that AIG may be crowded out in the race to raise dollars in that market.

--Written by Lauren Tara LaCapra in New York.

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