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Nippon Life said planning to buy Japanese rival Mitsui Life

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(Bloomberg) — Nippon Life Insurance Co., Japan’s biggest life insurer by assets, plans to acquire Mitsui Life Insurance Co. as early as in September, according to people with knowledge of the deal.

Nippon Life plans to offer 300 billion yen ($2.5 billion) to 400 billion yen for at least an 80 percent stake in Mitsui Life, said one of the people, who asked not to be named because the information isn’t public.

Buying Mitsui Life would contrast with a wave of multibillion-dollar takeovers abroad by Japanese insurers as the country’s aging population limits growth prospects at home. Purchasing the company would help Nippon Life vie with Dai-ichi LifeInsurance Co. as Japan’s largest earner of insurancepremium income.

“Nippon Life has been looking for a way to take back a clear No. 1 position from Dai-ichi Life,” said Mac Salman, head of Japan financials research at Jefferies Group LLC in Tokyo. “Mitsui may well have been an available and fast way for them to do that domestically.”

Nippon Life plans to spend as much as 500 billion yen on acquisitions, including overseas insurers and asset managers, according to a three-year business plan released in March. Previously, its strategy involved taking minority stakes in companies such as AIA Group Ltd. in Hong Kong, Indonesia’s Sequis Life and Reliance Group in India.

Insurers Gain

Shinichiro Kon, a spokesman for Nippon Life, confirmed the company is considering acquisitions as part of the plan, while declining to be more specific. Mitsui Life spokesman Norihito Kamakura said nothing has been decided.

The Nikkei newspaper reported on Nippon Life’s plan to buy Mitsui Life earlier on Wednesday, without saying where it got the information. Neither company is publicly traded.

Shares of Japanese insurers rose. Dai-ichi Life jumped 3.9 percent at the close of trading in Tokyo, and T&D Holdings Inc. gained 3.4 percent. The benchmark Topix index advanced 3.2 percent, following its steepest two-day drop since March 2011.

Sumitomo Life Insurance Co. agreed this month to purchase Symetra Financial Corp. for about $3.8 billion. Tokio Marine Holdings Inc. agreed in June to acquire HCC Insurance Holdings Inc. for about $7.5 billion, and Dai-ichi Life struck a deal last year to buy Protective Life Corp. for more than $5 billion.

With origins dating back to 1914, Tokyo-based Mitsui Life sells and underwrites individual and group life insurance products, property and casualty insurance, group pension plans and annuities. It has 7.4 trillion yen in assets and more than 10,000 employees, according to its website.

Nippon Life got 5.37 trillion yen from premiums in the year ended March, and Mitsui Life had 545 billion yen. That compares with Dai-Ichi Life’s 5.43 trillion yen.


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