Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Japan’s Nippon Life has agreed to buy Resolution Life, the UK insurance group founded by entrepreneur Sir Clive Cowdery, in a deal that values the business at $10.6bn.
It is the biggest overseas takeover by a Japanese insurer and signals an ongoing need by the country’s financial institutions to grow beyond their domestic market.
Bermuda-based Resolution Life, established by Cowdery in 2003, specialises in buying up books of life insurance business from other insurers.
Nippon Life already owns a 23 per cent stake in Resolution Life and will pay $8.2bn for the remaining shares, valuing the group at $10.6bn. The deal is to be funded by cash and is expected to be completed in the second half of next year.
US private equity group Blackstone, which is also a shareholder in Resolution, will stay on as investment manager for some of the company’s assets, Nippon Life and Resolution Life said in a statement on Wednesday.
Cowdery will remain in charge of Resolution Life after the deal.
He said: “Combining Resolution Life’s strengths, the investment management expertise of our partners at Blackstone and a well-funded parent gives us the opportunity to accelerate our growth.”
Nippon Life — which boasts 15mn customers and ¥87tn ($573bn) in assets — is under pressure to find revenue streams outside its home country, where returns are expected to fade because of a shrinking and ageing population.
The country’s biggest insurance groups went on a buying spree a decade ago — Dai-ichi Life bought Protective Life in 2015, while Meiji and Sumitomo made large-scale deals in the following year — before pulling in their horns.
The deal for Resolution would be Nippon Life’s second major grab for overseas growth this year. In May, the company agreed to pay $3.8bn for a 21.6 per cent stake in the US life insurer Corebridge.
Read the full article here