AIG to buy stake in Chinese motorcycle maker

NEW YORK (Reuters) - American International Group Inc (AIG.N), the world's largest insurer, said on Friday that it would buy a stake in Lifan Group, China's top motorcycle maker.

AIG spokesman Chris Winans confirmed that the purchase was a private equity investment through a fund at the company's asset management division, which managed nearly $744 billion as of September 30.

Winans did not disclose the terms or the size of the stake.

Yin Mingsha, owner of Lifan, told Reuters last October that he would sell no more than 20 percent of the company to outside investors and identified AIG and private equity firm Texas Pacific Group TPG.UL as potential partners.

The Shanghai Securities News reported earlier this week that AIG planned to buy 25 percent of Lifan.

Lifan, which is diversifying into car production, is targeting a domestic stock sale this year and plans to raise more than 1 billion yuan ($139 million) to help fund expansion of both motorcycle and car production, according to two sources familiar with the AIG-Lifan situation.

Many Chinese companies planning initial public offerings first sell stakes to large strategic investors to enhance their appeal on the public market.

Lifan motorcycles are exported to more than 100 countries, mostly in the developing world. The company rolled out its first self-developed cars in January 2007 in China and overseas.

The company is investing 2.4 billion yuan in phases to boost its car production capacity, which is currently 150,000 vehicles annually.

($1=7.182 Yuan)

(Reporting by Ed Leefeldt in New York and Fang Yan in Shanghai; Editing by Lisa Von Ahn and John Wallace)