Japan's private sector life insurer, Nippon Life Insurance, has signed an agreement to acquire an 85% stake in MassMutual Japan, a unit of US-based mutual life insurer MassMutual Financial Group, in a JPY104.2 billion (US$980 million) deal.
Through the latest deal, the Nippon Life plans to strengthen its bancassurance sales while diversifying sales channel in a shrinking domestic market.
In a statement, Nippon Life stated that transaction will “increase profit under ultra low – interest rate environment” and “steadily expand profit of group business” as per its growth strategies for mid-term management plan, which began last April.
MassMutual’s Japanese unit posts an annual insurance premium revenue of JPY323 billion. It sells insurance products through banks and stock brokerages.
Nippon Life plans to fund the deal with cash on hand. Under the terms of the deal, MassMutual Life Insurance Company CEO Mitsuru Imoto will continue to serve as president and CEO of MassMutual Japan after the transaction.
Pending receipt of regulatory approvals, the transaction is scheduled to be completed in May or June this year.
Post disposal of stake, MassMutual International will continue to own nearly 14.9% of the issued and outstanding shares of MassMutual Japan. The company will also support MassMutual Japan in a smooth business transition and further development.
Nippon Life’s latest deal follows its $2.5-billion acquisition of domestic rival Mitsui Life Insurance in 2016.