Prudential's Acquisition of AIA Still Hangs in Balance

Efforts to resuce American International Group Inc.'s Asian life-insurance unit still hangs in the balance after shareholders of U.K. insurer Prudential PLC forced the companies back to the negotiating table, says the Wall Street Journal.


Prudential revealed three months ago that it is paying AIG US$25 billion in cash and $10.5 billion in Prudential shares and other securities for AIG's AIA Group Ltd. division, but the deal has been met with several stumbling blocks since the announcement was made.


"The focus of the negotiators' efforts is on cutting the amount of Prudential stock AIG would get in the deal. One possibility being discussed was adding a so-called earn-out to the deal, which would boost payments to AIG down the road should the merged business hit certain performance targets," notes the Journal, citing people familiar with the matter. 


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