American International Group Inc is set to elevate Goldman Sachs Group Inc to the top role for handling the initial public offering of its Asian life insurance unit, sources said on Wednesday, a deal that could raise around $15 billion.

Goldman will share the role with Deutsche Bank AG and Morgan Stanley , the two banks AIG named as joint global coordinators last June when the IPO process for American International Assurance (AIA) initially began.

The names of the junior banks on the IPO were yet to be decided, the sources said.

Earlier this year, AIG added Citigroup Inc , Credit Suisse Group AG , Goldman Sachs, BofA Merrill Lynch , UBS AG , CCB International and ICBC International to help underwrite the deal. The IPO was pulled while Britain's Prudential Plc pursued a $35.5 billion offer for AIA that ultimately failed.

The AIA IPO, which could be the biggest ever on the Hong Kong stock exchange, could produce more than $500 million in fees.

On Monday, AIG named Mark Tucker as the new chief executive of AIA and formally kicked off the IPO.

The sources declined to be identified as the decision had yet to be made public. AIA declined to comment.

Deutsche Bank and Morgan Stanley did not immediately respond to requests seeking comment, while Goldman Sachs declined to comment.

One source said the underwriting banks would hold the kick-off meeting with AIA on Friday, although this could not be independently verified with other sources.

When the rest of the AIA underwriters were chosen in February, the hiring of Goldman invited critics to wonder how such a choice could be made given the contentious situation AIG and the Wall Street profit machine found themselves in when AIG nearly went bust.

That situation is still playing out, with Goldman saying earlier this month that its demands for billions of dollars from AIG ahead of a $182 billion government rescue package were based on legitimate prices.

AIG said at a July 2 panel that it had tried to negotiate with Goldman and other counterparties to trim demands, but they were unsuccessful.

DRAMA FROM THE START

The choosing of AIA's IPO handlers has come with its fair share of drama, since the process launched in full last year.

As an adviser to the U.S. government, Morgan Stanley was an early favorite to lead the IPO last year, although rival bankers were prone to mention that perhaps the Wall Street firm should leave the IPO to someone else given its advisory role to the Federal Reserve.

When Morgan Stanley and Deutsche Bank were chosen last June, some were surprised by the presence of the German bank. While it has been involved in some major listings in the region, it was hardly an Asia equity powerhouse.

All this chatter about IPO bankers became moot on March 1, when British insurer Prudential offered to pay $35.5 billion for AIA. The takeover offer ultimately failed, reviving the IPO.

Like any process in its early stages, the IPO process is fluid and could involve last minute changes.

(Additional reporting by Michael Flaherty; Editing by Chris Lewis)

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