(MENAFN - AFP) US insurance giant AIG said Thursday it would form a joint venture with Chinese insurer PICC and invest 500 million in its Hong Kong share sale next month, as the firm boosts its presence in China.
American International Group, which traces its roots to an agency founded in Shanghai in 1919, plans to "distribute life insurance and other insurance products" with PICC in major Chinese cities, according to a company statement.
The tie-up puts AIG in competition with its former Asian unit AIA, in which it owns about a 13.7 percent stake, as it tries to break into a market where domestic players dominate.
AIG's multi-million dollar move represents one of its biggest investments in Asia since it was bailed out by the US government during the 2008-2009 financial crisis.
In a statement announcing the bid, AIG promised it would not sell over 25 percent of the People's Insurance Company's shares in the next five years without the Chinese insurer's consent.
PICC, parent of the nation's largest non-life insurer PICC Property and Casualty, is seeking to raise 3.6 billion from its initial public offering in Hong Kong next month, according to Dow Jones Newswires quoting a term sheet.
The IPO, expected to be one of the world's biggest of its kind this year and the largest offering from a Chinese company since 2010, is scheduled for December 7, Dow Jones added.
It could also mark a reversal from a stagnant IPO market in Hong Kong, the top such market for the past three years which has taken a hit after Chinese companies grew worried about slowing economic growth.
Once the world's largest insurance company, AIG was rescued from bankruptcy by the Federal Reserve and the US Treasury with a record 182 billion bailout at the height of the financial crisis.
AIG has sold off assets as it restructured itself back to a path of profitability, raising money to repay the rescue.