HONG KONG
American International Group Inc. tapped Morgan Stanley and Deutsche Bank AG to take the lead role underwriting an initial public offering of its Asian life insurance unit expected to raise more than $5 billion, people familiar with the situation said.
The assignment could generate hundreds of millions of dollars in fees for the investment banks involved in the listing of American International Assurance Co. AIG plans to list the Asia-wide operation in the region during the first quarter of next year and the most likely venue will be Hong Kong's stock exchange.
Listing AIA in Asia will be a milestone in AIG's efforts to divest assets after an earlier auction of the unit failed to attract sufficiently high bids for a business with over $60 billion in assets, 20 million customers and an estimated value of around $20 billion as of Nov. 30, 2008, according to confidential documents drawn up by AIA and Blackstone Group, an adviser on the IPO. At least some proceeds from the AIA IPO will go toward repaying the Federal Reserve after it bailed out AIG last year.
Investment banks in the region depend heavily on Asia's IPO market for revenues, which took a big hit when share offerings ground to a halt last year. This year, a string of follow-on offerings and smaller IPOs have kept bankers busier, but the AIA deal would dwarf all of these in terms of fees. The only other deal of similar size or more on the horizon is an IPO for Agricultural Bank of China expected sometime next year. The last Asian IPO to raise over $5 billion was China Railway Construction Corp.'s US$5.7 billion offering in March 2008, according to data provider Dealogic.
Investment banks pitched hard for the deal, bringing top brass from New York and London to Hong Kong last week to argue their case during two days of interviews with a panel of Federal Reserve, AIG, and AIA officials. Deutsche Bank's presentation was led by London-based Michael Cohrs, the German bank's head of global banking. Credit Suisse Group's investment banking chief executive Paul Calello pitched for his bank and J.P. Morgan Chase & Co.'s co-head of investment banking, Bill Winters, lobbied in an effort to win the business, according to people familiar with the situation.
A person involved in the process said that Deutsche Bank and Credit Suisse made strong pitches, surprising many observers who thought Goldman Sachs Group Inc. and Citigroup Inc. were more likely candidates. The two advised AIG in the unsuccessful attempt earlier this year to auction off AIA, giving them a greater familiarity with the assets.
In the end, Morgan Stanley and Deutsche Bank emerged on top, although other banks are expected to earn smaller roles as bookrunners that should still generate substantial fees. One banker involved in the process estimated fees for global coordinators could be nearly double those for bookrunners.
The Federal Reserve nominated Morgan Stanley as a global coordinator due to the bank's role advising the Fed on all AIG-related matters.
More surprising was the selection of Deutsche Bank, which was seen as a dark-horse candidate before last week's interviews. Deutsche Bank has long had a strong presence in Asian foreign exchange and other trading businesses, only recently has it pushed to build up an investment banking franchise in Asia. Deutsche advised AIG on the sale of its Philippines franchise before AIG scrapped that sale in favor of integrating it into AIA.
The global coordinator is involved in every aspect of the IPO, including preparing documents, presenting the deal to regulators, and marketing the deal.
Founded in Shanghai in 1919, AIA's business covers 13 markets in Asia Pacific, including Australia, Hong Kong, India and South Korea. It is also the only foreign insurer holding a wholly-owned insurance license in mainland China.
The assignment could generate hundreds of millions of dollars in fees for the investment banks involved in the listing of American International Assurance Co. AIG plans to list the Asia-wide operation in the region during the first quarter of next year and the most likely venue will be Hong Kong's stock exchange.
Listing AIA in Asia will be a milestone in AIG's efforts to divest assets after an earlier auction of the unit failed to attract sufficiently high bids for a business with over $60 billion in assets, 20 million customers and an estimated value of around $20 billion as of Nov. 30, 2008, according to confidential documents drawn up by AIA and Blackstone Group, an adviser on the IPO. At least some proceeds from the AIA IPO will go toward repaying the Federal Reserve after it bailed out AIG last year.
Investment banks in the region depend heavily on Asia's IPO market for revenues, which took a big hit when share offerings ground to a halt last year. This year, a string of follow-on offerings and smaller IPOs have kept bankers busier, but the AIA deal would dwarf all of these in terms of fees. The only other deal of similar size or more on the horizon is an IPO for Agricultural Bank of China expected sometime next year. The last Asian IPO to raise over $5 billion was China Railway Construction Corp.'s US$5.7 billion offering in March 2008, according to data provider Dealogic.
Investment banks pitched hard for the deal, bringing top brass from New York and London to Hong Kong last week to argue their case during two days of interviews with a panel of Federal Reserve, AIG, and AIA officials. Deutsche Bank's presentation was led by London-based Michael Cohrs, the German bank's head of global banking. Credit Suisse Group's investment banking chief executive Paul Calello pitched for his bank and J.P. Morgan Chase & Co.'s co-head of investment banking, Bill Winters, lobbied in an effort to win the business, according to people familiar with the situation.
A person involved in the process said that Deutsche Bank and Credit Suisse made strong pitches, surprising many observers who thought Goldman Sachs Group Inc. and Citigroup Inc. were more likely candidates. The two advised AIG in the unsuccessful attempt earlier this year to auction off AIA, giving them a greater familiarity with the assets.
In the end, Morgan Stanley and Deutsche Bank emerged on top, although other banks are expected to earn smaller roles as bookrunners that should still generate substantial fees. One banker involved in the process estimated fees for global coordinators could be nearly double those for bookrunners.
The Federal Reserve nominated Morgan Stanley as a global coordinator due to the bank's role advising the Fed on all AIG-related matters.
More surprising was the selection of Deutsche Bank, which was seen as a dark-horse candidate before last week's interviews. Deutsche Bank has long had a strong presence in Asian foreign exchange and other trading businesses, only recently has it pushed to build up an investment banking franchise in Asia. Deutsche advised AIG on the sale of its Philippines franchise before AIG scrapped that sale in favor of integrating it into AIA.
The global coordinator is involved in every aspect of the IPO, including preparing documents, presenting the deal to regulators, and marketing the deal.
Founded in Shanghai in 1919, AIA's business covers 13 markets in Asia Pacific, including Australia, Hong Kong, India and South Korea. It is also the only foreign insurer holding a wholly-owned insurance license in mainland China.
1 comentario:
La aseguradora estadounidense AIG ha contratado a Morgan Stanley y Deutsche Bank como coordinadores globales de la Oferta Pública Inicial (OPI) de 5.000 millones de dólares de su filial asiática, American International Group´s Asian (AIA), según informa hoy el diario `Financial Times´, que cita fuentes cercanas al proceso. La salida a bolsa de la filial se convertirá en una de las mayores operaciones de este tipo en dos años, y ambos bancos de inversión se embolsarán una buena cantidad como asesores de la misma. La elección de Morgan Stanley era previsible, teniendo en cuenta su asesoramiento a la Reserva Federal estadounidense (Fed) durante el rescate de la propia aseguradora. Sin embargo, no se esperaba que Deutsche Bank actuara también como coordinador general ya que los analistas auguraban que este papel estaría reservado para bancos de inversión estadounidenses.
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