UK insurer Prudential Plc has agreed to buy American International Group's Asian life insurance arm for $35.5 billion in cash and stock.

Under the terms of the agreement, Prudential will pay $25 billion in cash and $10.5 billion in stock and securities. About $20 billion of the cash offer will be generated through a rights offering, while the remaining $5 billion will be taken from the sale of bonds, the company said in a statement.

"This transaction is hugely exciting and a one-off opportunity. It puts us in a strong leadership position in all the critical growth markets in the region," said Tidjane Thiam, the chief executive officer for Prudential.

The deal is Mr Thiam's first since he assumed his post 5 months ago. Through the acquisition, Prudential adds over 20 million customers from an institution that has more than $60 billion of assets in the region alone. AIG's range of services covers life, accident and health insurance, as well as private retirement planning and wealth management.

The company will be listing its shares on the Hong Kong Stock Exchange and the London Stock Exchange when the transaction is completed. Its headquarters will remain in London.