Prudential's plans to buy AIG's Asian business edged a step closer as regulators look set to approve the deal.
The UK's largest insurer faced a setback in its plan to buy AIA for $35.5bn (£24bn) last week when the FSA blocked its £21bn rights issue to part-fund the deal because of concerns over its capital base.
But according to Reuters, citing sources close to the deal, UK regulators have given the go-ahead for the acquisition after the terms of the deal were amended and the insurer is now set to launch its rights issue within days.
As part of the tweaked deal, AIA's US-government owned parent AIG has agreed to cut the $25bn cash component by $2bn with the final price remaining the same.
In a move reported to have appeased the FSA, Prudential has rearranged $5bn of senior debt to be converted into contingent capital.
It is not clear, however, whether the UK Listing Authority has given its all clear for the deal - something which could delay Prudential's rights issue.
AIG is nearly 80% owned by the US government after it was forced to rescue the company with a $182.3 aid package at the height of the financial crisis - the biggest bail-out in US corporate history.
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