British insurer Prudential PLC on Monday said it had agreed to purchase American insurance giant AIG's Asian branch AIA for 35.5 billion U.S. dollars.

"Prudential PLC has reached agreement with American International Group Inc. (AIG) on terms for the combination of Prudential and AIA Group Limited, a wholly-owned subsidiary of AIG," Prudential said in a statement.

The AIG board has approved the sale and the two sides are finalizing the terms and financing for the deal, which is AIG's largest asset sale since its September 2008 bailout.

"AIG will receive total consideration of 35.5 billion dollars, comprising 25.0 billion dollars in cash and 10.5 billion dollars in New Prudential Shares and other securities," added the statement.

The Hong Kong-based AIA is a 90-year-old business that manages more than 60 billion dollars of assets and provides coverage to about 20 million customers, close to a third of AIG's total customer base.

Prudential, Britain's largest insurer, has a market capitalization of around 23 billion dollars.