The pricing of the IPO, set to be the world's third biggest, comes amid a boom of new listings in Asia and puts an end to a long-running saga for American International Group Inc.
AIA, the Asian life insurance arm of AIG, raised $17.9 billion by pricing its Hong Kong IPO at the top of its range, as investors piled into a company with a wide footprint across rapidly growing Asia.
The pricing of the IPO, set to be the world's third biggest, comes amid a boom of new listings in Asia and puts an end to a long-running saga for American International Group Inc.
Its bid to sell AIA and use some of the proceeds to pay back part of a whopping $182.3 billion US bailout it received during the financial crisis began two years ago and included two failed auction attempts and two floatation efforts.
AIA said on Friday the IPO was priced at HK$19.68 each and fully exercised the upsize option, confirming an earlier Reuters report. If the underwriters exercise the over allotment option, the IPO size will rise by 15% to $20.5 billion. AIA's trading debut is set for October 29.
"Investors did not dare to miss this jumbo deal, as the market has ample liquidity and the sentiment is very strong," said Antonny Cheng, a fund manager at Gain Asset Management Ltd.
AIA has been in the Asian region for more than 90 years and operates in 15 markets, with forecast pre-tax operating profit of $2 billion.
Life insurance premiums in Asia-Pacific are forecast to grow at a compound annual clip of 12.3% between 2009-2014, Sigma Swiss Re estimates, compared with flat to modest growth in other parts of the world.
Still, the company faces a tough challenge with expanding in China, where the mainland's top industry players dominate and more foreign competitors are flooding the market.
The IPO will value AIA at $30.5 billion at the top end, with AIG holding a 41.6 percent stake that will drop to 33% if the green-shoe option is exercised in full.
"It's more or less fully valued after the shares were sold at the top end," said Francis Lun, general manager with Fulbright Securities. "Still one could expect a 5% upside on debut."
AIA sold 5.86 billion secondary shares and exercised the upsize option to sell an additional 1.17 billion secondary shares due to strong demand from investors.
Unlike many other foreign insurers, AIA has 100% ownership of its entities in China, Indonesia, Malaysia, Thailand and Vietnam. AIA has more than 300,000 agents in Asia.
"This is a cost effective way for IPO investors to ride China's growth," said Francis Gaskins, president of IPOdesktop.com in Marina del Rey, California.
Asian IPOs raised $90 billion in the first three quarters, more than double the combined total from the United States, Europe, the Middle East and Africa, according to Thomson Reuters.
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