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Nippon Life is in talks to buy global life insurance rival Resolution Life for about $8.2bn in the largest-ever overseas deal by a Japanese insurer, according to people close to the company.
The planned all-cash acquisition of the Bermuda-based closed book consolidator, first reported by Nikkei, is an attempt by the Japanese insurer to diversify beyond its domestic market where growth is expected to fade because of a shrinking and ageing population.
Nippon Life, which is Japan’s biggest life insurer by total assets, has lagged behind its rivals Meiji Yasuda, Sumitomo Life and Dai-ichi Life in striking overseas deals.
In a statement Resolution Life said it was in the “final stages” of discussions with Nippon Life regarding a potential acquisition.
“There can be no certainty that any transaction will proceed and the Company will make further announcements when appropriate,” Resolution said in a statement to the London Stock Exchange.
Nippon Life, which has built up a 23 per cent stake in Resolution after an initial purchase of shares in 2019, is seeking to buy the remainder from holders such as US private equity group Blackstone.
A spokesperson for Resolution Life declined to comment further on the proposed deal.
Nippon Life noted the media reports on the proposed agreement in a statement and a spokesperson declined to comment further.
Resolution Life, founded in 2003 by British entrepreneur Sir Clive Cowdery, has over the past two decades deployed about $18bn into the global life insurance sector through mergers, acquisitions and consolidation activity. It has operations in Bermuda, the UK, the US, Australia, New Zealand and Singapore and manages around $385bn of assets.
The proposed acquisition by Nippon Life comes as an increasing number of Japanese financial services giants, including banks and asset managers, are weighing overseas deals, primarily in the US and UK.
In their efforts to offset the implications of the long-term decline of the domestic market, Nippon Life’s three major Japanese competitors have embarked on large-scale dealmaking in recent years. Dai-ichi bought Protective Life in 2015, while Meiji and Sumitomo made large-scale deals in the following year.
The deal would be Nippon Life’s second major grab for overseas growth this year. In May, the company agreed to pay $3.8bn for a 20 per cent stake in the US life insurer Corebridge.
That deal was, until now, Nippon’s biggest-ever acquisition at home or abroad.
Analysts said at the time that it underscored Nippon’s need to catch up with rivals on overseas expansion.
While its rival Dai-ichi Life was targeting 40 per cent of profits from overseas businesses by March 2027 — up from 34 per cent in 2022 — Nippon generated just 4 per cent of core profit from its overseas business last year, Moody’s analysts said in May.
