Chinatrust buys stake in AIG's Taiwan unit

posted: 10 DAYS 7 HOURS AGO

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TAIPEI, Taiwan -Taiwan's biggest credit card issuer Chinatrust Financial Holding Co. says it will buy a 30 percent stake in AIG's Taiwan life insurance unit from Hong Kong-based China Strategic Holdings for $660 million.

Chinatrust's announcement Tuesday followed its statement earlier this month that it is considering legal action against American International Group Inc. over bids for Nan Shan Life Insurance Co, the AIG unit.

AIG announced Oct. 12 the sale of its nearly 98 percent stake in Nan Shan to an investor group consisting of China Strategic and Hong Kong-based Primus Financial for about $2.15 billion, a figure Chinatrust said was lower than its bid.

Chinatrust said in a statement Tuesday that in exchange for the Nan Shan deal, China Strategic will buy a 9.95 percent Chinatrust stake through a private placement for 20.8 billion New Taiwan dollars ($647 million).

The joint China Strategic and Primus acquisition of Nan Shan still has not been finalized pending approval from the Taiwan government.

The Taiwan government is examining the deal closely and has said it will reject it if regulators determine that Chinese funds are involved. Taiwan law does not allow Chinese investment in the financial sector, including insurance companies.

Taiwan and China split amid civil war in 1949, and the self-governing island is sensitive about losing control of its economy to Beijing.

2009-11-17 22:58:07