Insolvent American International Group, Inc. (AIG) the parent company of Philippine American Life Insurance Company (Philamlife), announced it will be selling its global assets, including Philamlife, to repay the $85 million lifeline extended by the U.S. government. This was revealed by Philamlife president Jose Cuisia himself. Potential buyers of Philamlife stand to acquire the undisputed market leader in life insurance and a dominant national brand. Per Cuisia, Philamlife is the “crown jewel” of AIG’s operations in Asia, with P170 billion in assets and a net worth of P49.5 billion. Few suitors have made their intentions clear at this early stage, except for the Yuchengco group, which, it is widely perceived, would need to find a partner or partners to be able to take over Philamlife. Yuchengo group officials declined to comment on the progress of reported talks on its proposed purchase of Philamlife. About 10 other local and foreign entities have expressed interest in acquiring all or parts of the group, including some of the biggest names in the Philippine business scene.
Mr. Cuisia stressed to policy holders and the general public that Philamlife has “strong capital base and we have always maintained a very conservative investment policy” and that “AIG’s divestment decision is not a reflection of their subsidiaries’ business or historical performance.” He’s right, of course. Philamlife is solid as a rock, which explains why its imminent sale is creating such a buzz.
According to BusinessWorld, AIG has three criteria as to who are the potential bidders. One, it has to be a strong reputable brand name. Two, it has to be an institution that’s strong financially. And three, it has to have a strategic fit as far as in providing policyholders and stakeholders the growth potential.
“Some will immediately be crossed out,” Mr. Cuisia said, referring to the interested buyers, as he pointed out that not all would be able to meet AIG’s criteria.
Rumors have it that former Central Bank governor Cuisia is quietly putting together a consortium to bid for Philamlife. He’s certainly in a position to pull it off, although he will need to tread very carefully to avoid any perception of self-dealing or conflict of interest. At the very least, he presumably has the ears of the American owners and can influence the course and outcome of any deal.