Prudential Plc said on Wednesday it is withdrawing from its effort to buy AIG's Asian life insurer, an expected move by the U.K. group after AIG turned down a $30.4 billion offer for the company.
As a result, Prudential <2378.HK> said it will not proceed with a $21 billion rights offering in London and Hong Kong designed to raise money to finance the deal.
The U.K. insurer originally offered $35.5 billion for AIA, then lowered it to $30.4 billion amid resistance from shareholders that the company was overspending.
Pru estimated the cost of the failed AIA transaction so far at about 450 million pounds ($659 million), which includes a break-up fee of 152.6 million pounds.
We listened carefully to shareholders over the price and initiated a renegotiation of the terms with AIG. Unfortunately, it has not been possible to reach agreement, Pru Chairman Harvey McGrath said in a statement. We are therefore withdrawing from the transaction.
Pru did not say that the AIG agreement has been formally terminated but said in the statement that it was expected.
(Reporting by Michael Flaherty; Editing by Ken Wills)