Prudential has agreed to buy AIG's Asian business for $35.5bn, which will be partially funded by a $20bn rights issue.
AIA Group will be combined with Prudential following shareholder and regulatory approval.
Pru will pay for the deal with $25bn in cash raised via rights issue and senior debt, while the remaining $10.5bn will be in new Prudential shares and other securities.
The deal will make Prudential the largest insurer in Asia, which is seen as a major growth region for insurance companies.
Following the deal, 60% of Pru's worldwide new business profits will originate in Asia.
However, the group says it remains committed to headquartering its business in London.
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