U.K.'s Prudential Scraps Deal To Buy AIA - TheStreet

U.K.'s Prudential Scraps Deal To Buy AIA

Prudential of the U.K. said Wednesday it is in talks with AIG to terminate the agreement to buy AIG's Asian life insurance unit.
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LONDON (

TheStreet

) --

Prudential

(PUK) - Get Report

of the U.K. said Wednesday it is in talks with

AIG

(AIG) - Get Report

to terminate the agreement to buy AIG's Asian life insurance unit.

Prudential had agreed to buy AIG but resistance from shareholders to the high price -- $35.3 billion -- put the deal in jeopardy. AIG rejected Prudential's revised offer of $30.375 billion on Tuesday.

"While AIA was an excellent opportunity, since we announced the potential transaction we have seen significant falls in the markets. We listened carefully to shareholders over the price and initiated a renegotiation of the terms with AIG," said Prudential Chairman Harvey McGrath, in a statement to the London Stock Exchange. "Unfortunately, it has not been possible to reach agreement so we feel it is in the best interest of our shareholders not to pursue this opportunity. We are therefore withdrawing from the transaction."

AIG, majority owned by the U.S. government following a $180 billion bailout, planned to use the proceeds from the sale to make a partial repayment to U.S. taxpayers.

-- Reported by Joseph Woelfel in New York.

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