Nippon Life to buy Resolution in $8.2 billion deal as it pursues US growth

TOKYO/HONG KONG : Nippon Life Insurance plans to acquire all the shares it does not own in Resolution Life Group Holdings for about $8.2 billion - an all-cash deal that gives Japan's biggest insurer a firmer footing in the U.S. market.

The deal is the largest overseas acquisition by a Japanese insurer to date and the second major transaction announced by Nippon Life this year. Japanese insurers are keen to expand abroad given limited growth prospects at home due to a shrinking and ageing population.

"For some time we have wanted to own a business that could be core in the largest global insurance market - the U.S.A," Hiroshi Shimizu, Nippon Life's president, told a news conference on Wednesday.

"Resolution is an excellent company in a market that will grow so we want to secure its potential," he said.

Nippon Life currently owns about 23 per cent of Bermuda-based Resolution Life and aims to make it a wholly owned subsidiary in the second half of 2025.

The deal values Resolution Life, owned by a range of investors including global investment firm and business partner Blackstone, at $10.6 billion. Resolution Life will continue to be led by Chairman and CEO Clive Cowdery.

As part of the deal, Nippon Life will also acquire the remaining 20 per cent stake it does not own in MLC Life from National Australia Bank for about A$500 million ($320 million) and merge it with Resolution Life Australasia to form Acenda - a new primary life insurer.

Nippon Life, which has lagged domestic peers in U.S. acquisitions, just closed on Tuesday the purchase of a 21.6 per cent stake in U.S. insurance firm Corebridge Financial for $3.8 billion.

It has also sought to diversify its domestic business, buying nursing care provider Nichii Holdings for $1.4 billion in November last year.

Nippon Life has made global expansion a strategic priority for this financial year and the next, and aims to double group core operating profit to about 1.4 trillion yen by 2035.

Established just 7 years ago, Resolution Life is a closed-book insurer that purchases existing insurance policies from insurers in the U.S. and other countries.

It has $85 billion of assets under management and 4.3 million policies, according to Nippon Life.

Blackstone, which has been Resolution Life's investment management partner for directly originated assets including private credit and real estate, will continue the partnership after Nippon Life's takeover.

Within Japan's insurance sector, property and casualty insurer Tokio Marine Holdings has been particularly active. It bought speciality insurer HCC Insurance Holdings for $7.5 billion in 2015, paid $2.7 billion in 2011 for Delphi Financial and bought Philadelphia Consolidated for $4.7 billion in 2008.

Cross-border M&A involving Japanese companies has surged this year.

($1 = 1.5672 Australian dollars)