March 4, 2009 / 9:00 AM / 10 years ago

AIG's AIA gets Pru, Manulife offers; China Life out

(Adds details, quotes, byline)

By Langi Chiang and Aileen Wang

BEIJING, March 3 (Reuters) - China Life (2628.HK) has withdrawn from bidding for the Asian unit of embattled U.S. insurer American International Group (AIG.N) over worries about its quality, chairman of the Chinese insurer said on Tuesday.

Last Friday was the deadline to submit bids for American International Assurance Company Ltd., the roughly $20 billion Hong Kong-based unit of AIG.

“We are no longer bidding for AIA. AIA’s asset quality, business direction and brand have all changed,” China Life (601628.SS) Chairman Yang Chao told reporters before the meeting of a parliamentery advisory body in Beijing.

Li Kemu, vice chairman of the China Insurance Regulatory Commission, said last week that Chinese firms would decide on purely commercial grounds whether to bid for AIA, while adding that the regulator had a favourable view of its assets, especially in China and Hong Kong.

Plans to sell up to 49 percent of AIA, considered AIG’s crown jewel in Asia, were put in place last fall shortly after the U.S. government saved AIG from bankruptcy with a rescue that has since ballooned to around $180 billion.

Hopes for an auction have faded, as economic conditions have worsened since the sale began, causing several major suitors to drop out.

AIG posted a record $61.7 billion quarterly loss on Monday and got a new but not necessarily final government bailout, after officials concluded again that letting the insurer fail would imperil the world financial system.

(Editing by Jacqueline Wong)

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