American International Group Inc., the insurer that counts the U.S. as its largest shareholder, said it plans to invest about $500 million in People’s Insurance Company (Group) of China’s initial public offering.
AIG currently owns about 9.9 percent of PICC Property & Casualty Co., a unit of PICC Group with publicly traded shares in Hong Kong, the insurer said in the statement through Business Wire today. PICC Group, China’s biggest property insurer, is seeking as much as HK$27.8 billion ($3.6 billion), according to a regulatory filing.
PICC Group has commitments for about $1.85 billion of shares from so-called cornerstone investors, including AIG, two people with knowledge of the matter said yesterday. Cornerstone investors typically agree to hold shares for a fixed period of time in exchange for a guaranteed amount of the offering.
The IPO would be the largest in Hong Kong since October 2010, when AIA Group Ltd. sold $20.5 billion of shares, and more than double the $3.2 billion raised by companies in the city this year, data compiled by Bloomberg show.
AIG is also exploring a joint venture with PICC Group and PICC Life Insurance Co. that plans to distribute insurance products, including life insurance, in major cities in China, AIG said in the statement.
Shares of PICC Property rose 0.8 percent to HK$9.95 as of 10:31 a.m. local time in Hong Kong. They have declined 5.2 percent this year, trailing the 17 percent gain in the benchmark Hang Seng Index.