AIG Sale of Taiwan Unit Could Fail (AIG)

American International Group AIG is facing the prospect of finding another buyer for its Taiwan unit after regulators threw out its proposed $2.2 billion sale to a Chinese company. According to a Reuters report, "Taiwan's economics ministry said AIG's plan to sell Nan Shan Life to battery maker China Strategic and Hong Kong investment firm Primus did not comply with regulations on mainland investment nor meet criteria on experience in the insurance business and ability to raise funds." AIG said in a statement that it was disappointed with the decision, and it would consult the buyers on whether to appeal. The buyers have 30 days to appeal the decision. AIG, which is looking to shed assets to pay back the U.S. government, first mentioning selling the unit in October. Further, this could be the second blown deal in less than six months. The Reuters report notes that "AIG lost a $35.5 billion sale of Asian insurance unit American International Assurance (AIA) in May. It must now choose between finding another buyer, who may offer a lower price for Nan Shan, or hold on to it and find other ways to pay back the bailout money." Wenli Yuan, senior analyst at Celent, a financial industry research and advisory firm, explained the implications to Reuters. "If lower bids are now forthcoming this will further reduce AIG's ability to repay U.S.-based debts." "AIG may now try to quickly find a willing and acceptable local bidder to complete this process and then re-focus energies on the AIA disposal in Hong Kong, a deal that is likely to contribute far more to the debt-reduction process." Shares of AIG are up 0.8% this afternoon, to $34.28.