Dai-ichi Life Insurance Co., which is currently among the three largest life insurers in the private sector in Japan, made a statement today, revealing that it is considering a purchase of a life insurer based in the U.S. The statement was a response to the report saying the company is to spend more than 4.87 billion dollars to acquire the US-based Protective Life Corp.
Dai-ichi Life said in its statement, which was cited by the Wall Street Journal: “It is true that we are looking into purchasing a U.S. life insurance company, it is not true that we have made a decision at this time.” A spokesman of the company refused to make any more further comments on the situation. As reported by the Financial Times, one person with direct knowledge of the process, who however is not permitted to discuss these issues to the public, made a confirmation that the company is in advanced talks with Protective Life Corp.
The deal, if finalized, would be a part of recent series of overseas acquisitions carried out by Japanese insurers, who are seeking to expand their reach outside Japan in order to attract a larger number of younger customers. The strategy is considered to be helpful for Dai-ichi to neutralize the long-term growth prospects at its home market, which are relatively weak due to ageing of the countrys population. The company reported a revenue of 6.04 trillion yen for the fiscal year that ended in March 2014.
According to the person familiar with the matter, Dai-ichi Life Insurance Co. Ltd is planning to buy 100% of Protective Life, which currently has a market value of 4.1 billion dollars and announced a 393.5-million-dollars 2013 net profit. Protective Life also has more than 2200 workers and assets that are valued at about 57.4 billion dollars. Before the talks are put to an end, the acquisition needs to be approved by the board of Protective Life Corp.
Dai-ichi Life Insurance Co. Ltd was losing 7.03% to trade at 1,402 Japanese yen per share by 6:26 GMT, marking a one year change of -0.21%. According to the information published on the Financial Times, the 14 analysts offering 12-month price targets for Dai-ichi Life Insurance Co. Ltd have a median target of 1,885, with a high estimate of 2,450 and a low estimate of 1,100. The median estimate represents a 25.00% increase from the last price of 1,508.