Nippon Life says to buy Mitsui Life in deal seen worth US$2.5b
[TOKYO] Japan's largest private life insurer Nippon Life Insurance Co said on Friday it would buy smaller rival Mitsui Life Insurance Co in the first major deal involving local life insurers in just over a decade.
The insurers said they have not agreed on the final price of the deal, but people with knowledge of the matter said Nippon Life would likely pay around 300 billion yen (US$2.5 billion) for an 85 per cent stake in Mitsui Life.
Nippon Life, which has about US$513 billion in assets, said it expects the deal to close by end-March. Under the terms, Nippon Life will buy all of Mitsui Life from a group of shareholders and then sell a 15 per cent stake to companies including Sumitomo Mitsui Banking Corp and Sumitomo Mitsui Trust Bank. "The Japanese life insurance market is a mature one, but there is room for growth," Nippon Life President Yoshinobu Tsutsui told reporters. The deal is the first involving Japanese insurers since merger that created Meiji Yasuda Life Insurance Co in 2004.
Mitsui Life offers products that are sold at banks and insurance brokers, an area in which Nippon Life lags its rivals.
Major Japanese life insurers have traditionally hired female sales agents to market their products to entire neighbourhoods, but a growing number of customers now prefer to buy insurance at brokers or banks, where they can compare policies.
Nippon Life has previously said it could spend up to 1.5 trillion yen on acquisitions and investments at home and abroad over the next 10 years. Japan's declining population, however, is forcing more insurers to look abroad for growth.
REUTERS
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