Monday newspaper round-up: Prudential to buy AIG Asia with record rights call

Prudential has won the support of both AIG's board and the US government to buy the giant US insurer's crown jewel Asian assets for $35.5bn (£23.5bn), the Telegraph reports.

The Times adds that the Prudential is poised to make the biggest cash-call in British corporate history to help to finance the acquisition of American International Group's Asian assets. Britain's second-largest insurer will tell the stock market this morning that it is in advanced talks to buy AIA for about $30bn (£19.6bn). The Pru plans to ask investors for about £15bn. Talks between AIG and Prudential were continuing into the early hours this morning, amid speculation that a formal agreement could be signed today.

BT's £8.8bn pension deficit is almost entirely of its own making because it failed to make adequate contributions and took big risks with its investment strategy, according to documents submitted by its rivals to Ofcom, the regulator. The documents, to be made public on Monday, form part of a consultation process by the telecoms watchdog on whether to allow BT to include some of the cost of reducing its pension deficit in the wholesale charges it levies on rivals, the FT reports.

Royal Bank of Scotland paid its investment bankers £1.3bn in bonuses for making just £1bn in profit last year, not the record £5.7bn declared last week. The state-backed lender's results show that £4.7bn of the investment bank's worst losses were hived off to the "non-core" division being wound down, the Telegraph estimates.

German Chancellor Angela Merkel has shot down claims by EU politicians of a rescue deal for Greece, denying categorically that Berlin has agreed to underwrite the Greek bond market. "That is definitely not the case. We've got a treaty that does not include any provision for bailing out states. We can best help Greece by making clear that Greece has to do its own homework, just like it is doing at the moment," she told ARD Television, the Telegraph reports.

Microsoft has encouraged other companies to complain about Google to antitrust regulators in its most outspoken attack on its rival. The software group, which for years has been the prime target of competition regulators in the US and Europe over the way it handled its near-monopoly of computer operating systems, wants to turn the spotlight onto Google's position as the world's biggest internet search and advertising company, the Times reports.

Royal Dutch Shell, the oil and gas group, is selling assets including its European liquefied petroleum gas business and fields in the North Sea to help meet the cost of its $28bn (£18bn) capital spending programme this year, say people involved in the proposed deals, the FT writes.

Rising demand for British manufactured goods is improving confidence in the immediate future, but investment plans are still being scaled back in response to continued uncertainty about the longer term, the Independent writes.

The EEF's latest quarterly survey, compiled with the BDO business advisory group, shows that on average companies' output and orders are in positive territory for the first time since mid-2008, before the worst ravages of the credit crunch. As a result, the EEF is forecasting that engineering companies will grow at an average of 3.5 % this year and 3.3% next, the Times adds.

At a time when the vast majority of private-sector workers are seeing their pay frozen, non-executive directors in FTSE-100 companies have awarded themselves inflation-busting rises of 5 per cent or more. Non-executive chairmen were given pay rises of 5.1 per cent during the past year, a survey by the respected analysts Incomes Data Services (IDS) reveals, the Independent reports.

Merck, the German pharmaceuticals and chemicals company, has agreed to buy Millipore, the US laboratory supplies maker, for $7.2bn, including net debt. The move comes just days after Millipore revealed that it had hired Goldman Sachs to solicit bidders for a possible merger or sale. At the time, it said it had no "definitive time-table" for the auction, the FT reports.