Taiwan’s financial regulator gave conditional approval on Thursday to AIG’s $2.2 billion sale of its Nan Shan Life insurance unit, bringing closer to an end an almost two year long sale saga.
The U.S. insurer, looking to pay back the government for a bailout, has not been able to seal the deal due largely to tight scrutiny from a regulator sensitive to the fate of Nan Shan policy holders, who account for about one-sixth of Taiwan’s 23 million population.
An earlier deal was rejected last year, forcing AIG to put the unit back on sale. It had made clear that it would not seek another buyer if the second attempt fell through.
The Financial Supervisory Commission said the buyer group, Ruen Chen Investment Holding, must put T$6 billion ($208 million) into a custody account, and will not be allowed to borrow money or develop real estate with Nan Shan without FSC approval.
“We have decided to ask Ruen Chen to meet all of the conditions 60 days after they receive our request,” the regulator said in a statement, adding that the deal will take effect after it has checked whether the conditions have been met.
Ruen Chen Chairman C. T. Cheng told Reuters he is in Shanghai and could not comment immediately as he has not seen the paperwork.
“This is very good. It finally came to an end,” said an analyst at a U.S.-based brokerage. “The conditions the FSC has set this time indicate that the FSC wants Ruen Chen to run Nan Shan like a real insurance firm instead of one that’s also heavily involved in real estate investments.”
The buyer group Ruen Chen is made up of shoe maker Pou Chen, retailer Ruentex and its property affiliate Ruentex Development.
(Additional reporting and writing by Faith Hung; editing by Jonathan Standing)