Nippon Life Insurance: To Buy Allianz Subordinated Bond For EUR500 Million
05 July 2011 - 7:13PM
Dow Jones News
Nippon Life Insurance Co. said Tuesday that it will invest about
EUR500 million, or about Y60 billion to buy a 1% to 2% stake in
German insurer Allianz, as part of its efforts to accelerate its
global reach.
Japan's largest life insurer by revenue said it will spend that
amount to buy convertible subordinated bonds to be issued by a
financial unit of Allianz.
The transaction will be completed by July 7 and by exercising
the conversion right, Nippon Life will be able to obtain Allianz
common shares at any time within next 10 years.
A Nippon Life spokesman said that while the eventual holding
depended on various factors, the company would end up with a stake
between 1% and 2% of Allianz shares based on current share
prices.
The move underscores how the nation's life insurance sector
feels it is in dire need of joining hands with global partners at a
time when Japan's population is shrinking and its life-insurance
industry is seen as saturated.
With this concern in mind, Nippon Life has already formed
several business tie-ups with foreign financial institutions
including U.S. Prudential Financial Inc. in 2009 and Northwestern
Mutual Life Insurance in 2010.
-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789;
Hiroyuki.Kachi@dowjones.com