AMERICAN International Group has sent detailed information on its Philippine American Life and General Insurance Co (Philamlife) to potential buyers, moving a step closer to the sale of its local unit, the Financial Times reported on Wednesday.

AIG has yet to decide whether it would sell Philamlife, the country's largest insurer, and its units in one transaction or break up the group and sell parts to different investors.

An unnamed senior executive of Philamlife said discussions with potential buyers were being handled by Deutsche Bank, which has been appointed to advise on a sale that analysts believe could be worth as much as $1 billion (S$1.5 billion), the FT reported.

The source did not disclose the recipients of the information, the paper added.

Philamlife said in October it had received offers from about 10 local and foreign groups after it was declared among those assets being sold by AIG to pay off debts to the US government.

China Banking Corp, one of two banks owned by Philippine conglomerate SM Investments Corp (SMIC), said last month it wanted to buy Philam Savings Bank, the consumer banking arm of Philamlife.

SMIC announced in October it was planning to bid for Philamlife, which had total assets of 170 billion pesos (S$5.22 billion) as of end-2007.

Aside from SMIC, conglomerate Ayala Corp has said it was studying a possible acquisition of Philamlife and its assets, as have Rizal Commercial Banking Corp and Metropolitan Bank & Trust Co, the Philippines' largest lender.

Other interested parties include Assicurazioni Generali SpA, Europe's third-biggest insurer, and Canada's Manulife Financial Corp, according to a Bloomberg report, citing people with knowledge of the matter.

Generali has teamed up with Banco de Oro Unibank Inc, the biggest lender by assets in the Philippines, and Malaysia's Kuok Group, Bloomberg cited the people as saying.

AIG to halt merger between Japan units due to sale
AIG said on Wednesday that it would halt the merger between its two Japanese life insurers, AIG Star Life Insurance and AIG Edison Life Insurance.

AIG, once the world's largest insurer, said in October that it would postpone the merger between AIG Star and AIG Edison, which was originally scheduled to take place on January 1, 2009.

But the merger process is now officially on hold as AIG plans to sell shares in AIG Star and AIG Edison along with American Life Insurance Co (ALICO) under its global restructuring plans, said AIG in a statement.

'The merger should reflect the intention of new shareholders,' AIG said in a statement.

AIG has been trying to sell assets after nearly collapsing in September and has said it plans to sell its businesses in Asia including Japan, Taiwan and the Philippines. -- THOMSON REUTERS