Prudential is withdrawing from its effort to buy AIG's Asian life insurer, an expected move by the UK group after AIG turned down a $30.4 billion offer for the company.
As a result, Prudential said it will not proceed with a $21 billion rights offering in London and Hong Kong designed to raise money to finance the deal.
The UK insurer originally offered $35.5 billion for AIA, then lowered it to $30.4 billion amid resistance from shareholders that the company was overspending.
Pru estimated the cost of the failed AIA transaction so far at about £450 million, which includes a break-up fee of £152.6 million.
"We listened carefully to shareholders over the price and initiated a renegotiation of the terms with AIG. Unfortunately, it has not been possible to reach agreement," Pru chairman Harvey McGrath said in a statement. "We are therefore withdrawing from the transaction."
Pru did not say that the AIG agreement has been formally terminated but said in the statement that it was "expected".
Reuters