Insurance giant Prudential of England may face fees

THE GAZETTE

Insurance giant Prudential of England may face a break-up fee and other costs totalling $659 million U.S. after withdrawing its $35.5 billion U.S. bid for the U.S. AIG's Asian life insurance business.

Prudential pulled out after AIG (American International Group) refused to renegotiate the price down to $30.4 billion U.S.. The deal would have made Prudential Asia's largest foreign-owned insurer.

The AIG deal generated heavy Prudential shareholder opposition over the cost - - they are due to meet in London next Monday when management may be challenged.

"We listened carefully to shareholders over the price proposed and initiated a renegotiation of the terms with AIG," said chairman Harvey McGrath in a statement. "Unfortunately it has not been possible to reach agreement and we are therefore withdrawing from the transaction."