Japan’s Dai-ichi Life Insurance said it will fully take over the mid-size Tower Australia Group by May as it seeks to shore up its business in growing overseas markets.
Dai-ichi, the country’s number-two life insurer, said the move marks the largest purchase of a foreign competitor by a Japanese life insurer.
The Japanese firm is the largest shareholder in Tower with a 28.96 percent stake, following its purchase of 37.6 billion yen (456 million dollars) in shares in 2008.
To take full control of the Australian insurer, Dai-ichi will make an additional share purchase through a tender offer for about 99.6 billion yen, the Japanese insurance house said.
“The company believes it will be able to strengthen its operating base significantly in Australia by acquiring 100 percent ownership of Tower,”
Dai-ichi said in a statement.
“After the transaction, the company believes its overseas earnings base will expand significantly and therefore the company can make progress in diversifying its earnings geographically.”
The deal represents Dai-ichi’s first acquisition since the company went public in April.
Tower’s predecessor, founded in New Zealand in 1869, spun off its Australian operations in 2006. It registered premium revenues totalling about 942 million Australian dollars (950 million US) in the year ended September, Dai-ichi said.
The Australian life insurance market totals 2.5-3 trillion yen, accounting for about a tenth of Japan’s, but demand for death benefits and medical insurance has been growing rapidly, a Japanese financial daily reported.
Tokyo, Dec 28, 2010 (AFP)
