Prudential CEO Tidjane Thiam indicated that the British company would sell its stake in Tata AIG Life to the Indian conglomerate. In March, Prudential had acquired AIG's Asia business for $35.5 billion, which included the 26 per cent stake in Tata AIG.
Prudential, which has a 26 per cent stake in ICICI Life Insurance, the country's largest private sector life insurer, is barred from acquiring stake in another life insurance venture. As a result, it has no option but to sell the stake. Thiam said Tata has the first right of refusal on the shares.
A Reuters report said Tata and Prudential were in advanced stages of talks on the price at which the shares would be sold to the Indian conglomerate.
However, Tata AIG spokesperson could not be reached for comment. While announcing a $21 billion rights issue, the insurer said that it would sell assets to "enhance value for shareholders" and meet the requirements of regulators in China, India and Malaysia.
Prudential will sell a 50 per cent stake in AIA's Chinese business, which has an embedded value of $1.2 billion, and a minority stake in its Malaysian unit, Thiam said.
Over the last two months, the Tata group has offered no comments on the stake acquisition in the life insurance venture. Market sources do not rule out the possibility of the Tatas roping in another partner later.
Earlier, a Tata group executive had told Business Standard that a partner may be inducted later.
Most Indian players, which ventured into the insurance arena, had roped in a foreign partner. While Sahara has so far not roped in a foreign partner, Anil Dhirubhai Ambani Group is looking at various options, including roping in an investor in Reliance Life.
The Prudential-AIG deal covered the life venture with the Tatas but the general insurance venture was outside the ambit of the transaction as the US insurer held the stake through a separate investment outfit.
Tata was among the initial set of players to foray into the insurance sector after the business was opened up to private companies in 2000. Two days after AIG announced its decision to sell the Asian life insurance venture, AIG India executives held detailed discussions with Insurance Regulatory and Development Authority officials.
