TAIPEI - Shares in China Strategic Holdings Ltd fell more than 6 percent on Tuesday after the battery maker said it had formally ended a US$2.2 billion bid to buy insurer American International Group Inc's Taiwan unit after regulators rejected the deal.
Hong Kong-listed China Strategic said in a statement late on Monday that it and partner Primus Financial Holdings had agreed with AIG to terminate the deal to buy Nan Shan Life effective Monday.
Last month, Taiwan's regulators blocked the bid for Nan Shan from China Strategic and Hong Kong investment fund Primus, saying the two did not have experience in the insurance industry and lacked the ability to raise capital for future operations.
The buyers had the option of appealing, but China Strategic said earlier this month that AIG was leaning towards a new sale.
AIG's Taipei-based media relations company said on Tuesday that the insurer was "evaluating its options with respect to its ownership of Nan Shan".
Primus Financial declined to comment.
China Strategic shares were 6.5 percent lower at HK$0.29 while the Hang Seng Index was up 0.3 percent.
It was the second failed attempt in Asia by AIG to sell assets to repay billions of US taxpayer dollars used to bail out the company. In May, the $35.5 billion sale of its American International Assurance unit to Britain's Prudential Plc fell through.
AIG plans to list AIA in Hong Kong on Oct. 29 in a $15 billion float, the biggest ever in Hong Kong and also the biggest ever insurance float.
Analysts say AIG is likely to put Nan Shan back on the market, although an IPO is an outside possibility.
Taiwan banks Fubon Financial Holding Co Ltd and Chinatrust Financial Holding Co Ltd have expressed interest in buying Nan Shan, while analysts have said Cathay Financial Holding Co Ltd may also be interested.
A source with direct knowledge of the sale process told Reuters earlier this month that regulators were unlikely to take issue with bids from Fubon or Cathay, either alone or with partners such as private equity companies, but they would be wary of a Chinatrust bid, because the firm, Taiwan's biggest credit card issuer, is heavily leveraged.
All three were losing bidders in the original sale of Nan Shan last October.
Nan Shan is Taiwan's No.3 life insurer by market share. Its policyholders make up almost a sixth of the island's population.
