Pru to buy AIG Asia with $20bn rights issue

Prudential has agreed to buy AIG’s Asian business for $35.5bn, which will be partially funded by a $20bn rights issue.

AIA Group will be combined with Prudential following shareholder and regulatory approval.

Pru will pay for the deal with $25bn in cash raised via rights issue and senior debt, while the remaining $10.5bn will be in new Prudential shares and other securities.

The deal will make Prudential the largest insurer in Asia, which is seen as a major growth region for insurance companies.

Following the deal, 60% of Pru's worldwide new business profits will originate in Asia.

However, the group says it remains committed to headquartering its business in London.