Japan's Dai-Ichi Life Insurance to buy US peer Protective Life for $5.7 bn

Dai-Ichi Life Insurance Co, Japan's second-largest life insurer, yesterday struck a deal to buy US insurer Protective Life for $5.7 billion (582.2 billion).

The proposed deal is the biggest overseas acquisition by a Japanese life insurer, and the second-biggest takeover of a US company by a Japanese firm in the past 12 months, according to Bloomberg data.

Under the terms of the deal, Dai-ichi will pay $70 per share in cash, a 34-per cent premium over Protective's closing stock price of $52.30 on 30 May.

Dai-ichi Life said that it will sell up to 250 billion ($2.4 billion) of shares to fund part of the acquisition.

Founded in 1907 and listed on the New York Stock Exchange, Protective Life is a medium-sized life insurer operating in the individual life and annuities business nationwide with a market share ranking of 36th in the US as measured by group premium income.

With a market cap of $4.6 billion, the Birmingham, Alabama-based insurer reported net income of $393 million in 20134 and has total assets of $68.7 billion.

The acquisition will make Dai-ichi Life the 13th largest global insurer, with total assets of $424 billion and boost its premium income to about 4.65 trillion.

Tokyo-based Dai-ichi Life is the second-largest life insurer in Japan after Nippon Life Insurance.

Founded in 1902, Dai-Ichi is the oldest mutual insurance company in Japan and has total assets of 33,474 billion .

Its earlier overseas acquisitions include Sydney-based Tower Australia Group and a stake in Janus Capital Group Inc.

In India it has as joint venture called Star Union Dai-ichi Life Insurance Co Ltd with Bank of India and Union Bank of India.