By itself, Prudential’s acquisition of AIA Group from AIG represents a huge fraction of the M&A activity in the last year.A little background: Britain’s Prudential bought AIG’s Asia operations for $35.5 billion in cash and shares. According to the Wall Street Journal, the deal will make Prudential the leading insurer in Southeast Asia and AIG will now be able to pay back a sizeable chunk of the money ($182 billion) they owe the US government.
Several banks worked on the deal.
On the target side (AIA):
- Goldman Sachs
- Morgan Stanley
And on the acquirer side (Prudential):
- JP Morgan
- Credit Suisse
Prudential shares tumbled on the news. (The acquiring company generally does not do well after an M&A deal.)
Still, this deal is good news for the market recovery. M&A action has been slow since the record pace reached in 2007. This year, pace has regained momentum (up 29% from June to August compared to the previous three months) but Morgan Stanley still predicts the M&A rebound will be slow for years to come.
But Blackstone must be happy. Thanks to the Wall Street Journal’s deal logic, we know that Blackstone wasn’t even on the top 10 M&A list until this deal went through. (Yellow is M&A action from this deal, blue is previous YTD action)
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