Nippon Life Insurance has entered into final negotiations to acquire U.S. life insurer MassMutual Life's subsidiary in Japan.
MassMutual recently sold off another of its Asian units, Hong Kong-based MassMutual Asia, to Yunfeng Financial Group, the company backed by Alibaba billionaire Jack Ma, paid $1.7 billion, with about 60 percent of that sum in cash, and the rest in Yunfeng stock.
Nippon Life according to the Nikkei Asian Review, will spend $886 million to $1.77 billion to purchase a majority stake in the company. MassMutual's Japan subsidiary specializes in selling insurance products over the counter.
Winners And Losers
Both Nippon Life and MassMutual will look to agree on the basics of the deal in the near future, and sign an agreement within this fiscal year ending in March 2018. Nippon Life has lagged behind its domestic competitor Dai-ichi Life in this area, and will look to strengthen its business through the acquisition.
This is the first consolidation in the Japanese life insurance market since Nippon Life acquired Mitsui Life Insurance in 2015. With Japan's largest life insurer on the move again, there may be more deals ahead.
The Commonwealth Bank of Australia recently sold its CommInsure and Sovereign units to AIA and fellow Australian bank Suncorp is said to be putting its life unit up for grabs.
