Pru’s Thiam: ‘I regret AIA deal did not proceed’

Prudential CEO Tidjane Thiam says he “very much regrets” the collapse of the insurer’s giant $35.5bn AIA takeover, which has cost the company £377m.

Thiam revealed the cost of the aborted acquisition has dropped from an earlier estimate of £450m, as the group closed the foreign exchange hedging positions and worked with advisers to minimise costs.

He says the cost to the company is likely to be £284m after expected tax relief.

The costs of the deal included a £153m break fee paid to AIG, foreign exchange hedging costs of £100m, underwriting fees of £58m and adviser fees of £66m.

Thiam says the costs associated with the transaction will not impact the group's dividend policy, with Pru raising its 2010 half-year dividend by 5% to 6.61p per share.

"Alongside the strong performance of the business, the first half of 2010 was dominated by our proposed acquisition of AIA, the Asian arm of AIG," Thiam says.

"The board unanimously believed that this acquisition represented a unique opportunity to significantly amplify and accelerate our successful strategy in Asia. It was an opportunity which was available to us only because of the quality and standing of the group.

"We very much regret that this transaction did not proceed and that costs were incurred."