American International Group accepted a $2.16bn cash offer for its Taiwan Nan Shan Life unit from a group led by local conglomerate Ruentex, marking the beginning of the end of a drawn-out process fraught with political wrangling.
AIG has been trying to sell the unit for some 15 months as part of its plans to help pay back the US government for its $180bn bailout, but regulatory issues have dogged the sale process and might yet delay it further.
The buyer group, called Ruen Chen Investment and comprising Ruentex Industries and shoe maker Pou Chen Corp, signed a deal yesterday for the 97.57 percent of Nan Shan that is for sale, Ruentex said in a statement to the Taiwan stock exchange.
"Ruen Chen offers strong operational and funding capabilities and possesses a clear ability to satisfy the strict criteria that governed AIG's bid review process," said Robert Benmosche, AIG president and chief executive.
AIG had a deal worth $2.15bn last year blocked by the regulator, citing concerns about the previous bidders' industry experience. That forced AIG to put the asset back on sale and prompted Mr Benmosche to personally visit the regulators in December to discuss the sale.
Sources have previously said that Ruentex, a major player in the hypermarket business in China and Taiwan, may not meet all of the five criteria the regulator has laid down for a buyer.
Those criteria are that any buyer needs to show fundraising ability for future operations, a long-term commitment to run Nan Shan, experience in running an insurance business, and must promise to take care of employees and policyholders.
It must have funding sources that meet Taiwan regulations. Ruentex Chairman Samuel Yin has owned and run insurance and asset management businesses in the past, but has since sold them at a profit. The regulator, seeking a long-term stable owner, in general does not approve of buying assets just for resale.