Deadline for sale of AIG’s Taiwan unit extended

AIG and a consortium comprising Primus and China Strategic have agreed to extend the deadline for the completion of the sale of AIG’s Taiwan unit.

Primus Financial Holdings and China Strategic Holdings have amended the purchase agreement with American International Group (AIG) with respect to the purchase of Nan Shan Life Insurance Company from the global insurance major.

The existing purchase agreement has now been extended to 12 October 2010 in order to accommodate the completion of the sale of AIG’s stake in its Taiwan unit Nan Shan to the consortium following delays in obtaining regulatory approvals from Taiwanese authorities. 

Primus and China Strategic agreed to acquire a 97.57 percent stake in the Taiwanese insurance company for $2.15 billion from AIG in October 2009. The consortium reportedly beat out competition from the likes of The Carlyle Group, Bain Capital and MBK Partners, Chinatrust Financial, Fubon Financial and Cathay Financial Holding Company.

When the purchase agreement was signed, the completion of the deal was subject to regulatory approval. However, the proposed deal ran into trouble as the Taiwanese government suspected China Strategic had funding from mainland China and the go-ahead from Taiwanese authorities has not been forthcoming.

A resolution was expected by June. 

“This is a sign to the Taiwan authorities and to Nan Shan of our commitments to the future of the company,” Robert Morse, chairman and co-CEO of Primus Financial, said in a statement. 

Primus Financial was launched in April 2009 with initial permanent capital of $1 billion from an undisclosed Asia-based high-net-worth family. Founded by Morse and co-CEO Huan Guocang, the firm has also raised more money since its launch and is focused on investments in insurance, brokerage and advisory, banking and asset management.

In April earlier this year, Primus acquired New York-headquartered brokerage and advisory firm Chapdelaine & Co. for an undisclosed sum. 

China Strategic is a Hong Kong-listed investment holding company involved in the making and trading of battery products as well as investments in securities. The company will own an 80 percent stake in Primus Nan Shan, the vehicle through which the acquisition is being made, with Primus holding the remaining 20 percent stake.