(Bloomberg) -- Nippon Life Insurance Co. agreed to buy Resolution Life Group Holdings Ltd. for about $8.2 billion, the biggest takeover by a Japanese insurer as it seeks to grow beyond the domestic market.
Japanese life insurers are renewing their appetite for acquisitions at home and abroad after a lull following a string of multi-billion- dollar deals a decade ago. Nippon Life, the nation’s largest insurer by assets, is trying to diversify its profit drivers as the local market faces demographic challenges that are hindering growth prospects.
Nippon Life will buy the 77% of Resolution that it doesn’t own, the Japanese company said in a statement on Wednesday. The deal will be funded by cash and is expected to be completed in the second half of 2025, pending regulatory approvals.
It will also purchase a 20% stake in its Australian unit MLC Ltd. from National Australia Bank Ltd. for about A$500 million ($319 million) to make it a wholly owned subsidiary, which it plans to merge with its Resolution Australasian arm.
The transaction values Resolution Life at $10.6 billion. Formed in 2003 by Chairman Clive Cowdery, the Bermuda-based company acquires and manages portfolios of life insurance policies in markets including the UK, the US, Australia and New Zealand. It invests the assets and makes payouts when there are claims or policies mature.
“This deal could help Nippon Life diversify its geographic business portfolio and earnings sources,” S&P Global Ratings analysts wrote in a note, maintaining a stable outlook on its credit rating.
Blackstone Inc. is among shareholders selling stakes in Resolution Life, though it will continue a strategic partnership with the insurer. The alternative asset manager has had a role investing Resolution’s assets in areas including private credit, real estate and asset-backed finance.
“We wanted to have a company that will become the core of our overseas operations in the world’s largest life insurance market,” Nippon Life President Hiroshi Shimizu said at a news briefing, referring to the US.
The deal comes on the heels of another large investment abroad by Nippon Life, which completed the acquisition of a 21% stake in Houston-based Corebridge Financial Inc. for $3.8 billion from American International Group Inc. this week.
Nippon Life has long been the subject of speculation as a buyer of multi-billion assets in the US, where rival Japanese insurers have made big acquisitions. Dai-ichi Life Holdings Inc. struck a deal in 2014 to buy Protective Life Corp. for more than $5 billion. Sumitomo Life Insurance Co. and Meiji Yasuda Life Insurance Co. also acquired US insurers around that time.
Shimizu has said Nippon Life is looking to make large investments in major markets like the US. The company reiterated on Wednesday that it has set aside ¥2 trillion ($13 billion) as a war chest during its current midterm plan through 2026.
In total, it envisions ¥4 trillion in growth investment through 2035, with roughly half to be spent on insurance businesses abroad, 25% on overseas asset managers and 25% at home.
To diversify its domestic business, Nippon Life acquired nursing and child care provider Nichii Holdings for ¥210 billion earlier this year.
Nippon Life has already flagged interest in buying asset managers in the US and elsewhere. The company has about a 27% stake in Los Angeles-based TCW Group Inc., and Shimizu said increasing its holding is an option for boosting its asset management operation.
“We want to keep looking for opportunities in asset management and domestic businesses and make timely investments,” Shimizu said.
(Updates with comments from S&P in sixth paragraph)
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