American International Group Inc. plans to appoint former Prudential Plc Chief Executive Officer Mark Tucker to replace Mark Wilson as head of the bailed-out insurer’s main Asia unit, two people with direct knowledge of the matter said.
AIG CEO Robert Benmosche has told AIG’s board that Tucker will succeed Wilson at Hong Kong-based life-insurance unit AIA Group Ltd., one of the people said, declining to be identified because the appointment hasn’t been announced. The shakeup comes as AIG tries to get the unit ready for an initial public offering.
Benmosche, 66, who’s been CEO since August, is asserting control over AIA after Harvey Golub left as AIG’s chairman last week. The chief executive needs to divest the Asia business to help repay New York-based AIG’s $182.3 billion rescue by U.S. taxpayers. Earlier this year, he and Wilson disagreed over a proposed sale of AIA to Prudential, with Wilson preferring an IPO, a person familiar with the matter said.
“When there’s trouble in the company, you start replacing people and getting your guys in key positions to get your strategy, your vision,” said Ben Collett, head of equities at broker Louis Capital Markets (Hong Kong) Ltd.
Replacing AIA’s leadership may also complicate plans for an IPO by fueling “uncertainty” among potential investors, said Collett, who doesn’t hold AIG stock. “There’s a lot of knots they have to untangle before they can raise money” by selling shares, he said.
Experience in Asia
AIG is committed to “monetizing” AIA “as quickly as possible,” Benmosche wrote in a June 1 letter to employees as the Prudential deal collapsed. “We remain confident in the strength, value and potential of AIA.”
Tucker, 52, ran Prudential’s Asian business for a decade and was the London-based insurer’s CEO from 2005 until last year. He didn’t respond to a phone message seeking comment.
AIG spokeswoman Christina Pretto declined to comment. The decision to appoint Tucker was previously reported by Sky News and the Financial Times. Under the plan, which may be announced today, Wilson would remain at the unit until year end, the FT said, citing unidentified people close to the situation.
Wilson, 43, who started at AIG in 2006, is a New Zealand native and former CEO of Hong Kong operations at AXA Asia Pacific Holdings Ltd. He didn’t respond to messages seeking comment.
Doubts About Integration
AIA has more than 23 million customers and offices in at least 15 countries including China, India and Australia.
AIG had planned an IPO of AIA earlier this year until Benmosche struck a deal in March to sell the unit for $35.5 billion to Prudential. Wilson, who has led AIA since May 2009, told friends he’d step down if the Prudential transaction was completed because of doubts the integration would be successful, the FT reported May 25, citing an unidentified person.
The deal collapsed after Prudential investors balked at the price and AIG directors including Golub rejected a reduced bid that Benmosche had endorsed, a person familiar with the matter said at the time. Benmosche threatened to quit at a June 25 board meeting unless Golub left the company, the person said. The CEO also demanded more control over AIA and urged the board to dismiss Wilson, the person said.
Golub, 71, who was AIG’s fifth chairman since 2005, wrote in his resignation letter that Benmosche believed their relationship was “ineffective and unsustainable.” He was replaced by Steve Miller, 68, former CEO of auto-parts maker Delphi Corp. After the appointment, the Treasury and the Federal Reserve Bank of New York expressed confidence in the new chairman.
AIG is proceeding with a public offering of AIA, while remaining open to bids for all or part of the company, according to a person with knowledge of the plans who declined to be identified.
The sale of AIA will be AIG’s biggest step toward repaying U.S. taxpayers. The government has taken an almost 80 percent stake in AIG since the insurer was pushed to the brink of failure in September 2008.