Taiwan Watchdog Nixes Sale of AIG Unit

The company has about 4,000 employees.

In declining to approve the agreement, Taiwan's Financial Supervisory Commission said the sale would violate the nation's rules restricting investments in Taiwanese companies by investors in mainland China, according to reports in Thomson Reuters and other media. It also said that both China Strategic, a battery manufacturer, and Primus lacked experience in the insurance business.

In an e-mailed statement, AIG said it was "disappointed" with the decision. It said it had worked with Taiwanese regulators "from the outset of the sale process, and, in addition to meeting the criteria determined by the Investment Commission and other regulators, AIG believes that its additional accommodations of regulatory requests, including a seven-year lockup mechanism agreed to by the Primus Nan Shan consortium and a $325 million escrow agreement agreed to by AIG, demonstrate clear support for the Nan Shan capital structure and incontrovertible commitment to the long-term health and prosperity of Nan Shan."

AIG also said it will meet soon with the board and senior executives of Nan Shan "to determine how best to proceed."