Dai-ichi Life in Talks to Buy Protective Life, Nikkei Says

Jun 01, 2014 7:15 pm ET

(Updates with Dai-ichi’s statement, Protective Life’s stock, purchases by Japanese firms starting in third paragraph.)

June 2 (Bloomberg) -- Dai-ichi Life Insurance Co. is preparing to buy Protective Life Corp. for an amount that will probably exceed 500 billion yen ($4.9 billion) to expand in the U.S., Nikkei reported.

Final talks on price and terms may lead to a deal within days that ranks as the biggest takeover of an overseas firm by a Japanese life insurer, Nikkei said in an English-language version of its article, without saying where it got the information. Tokyo-based Dai-ichi will pay a premium on top of Protective Life’s stock price and set up a U.S. special-purpose company to merge with the Birmingham, Alabama-based insurer, the publication said.

Japan’s saturated market is spurring insurers including Dai-ichi to look overseas for new customers. The company said in a statement through the Tokyo Stock Exchange that it’s considering buying a U.S. insurer and that no decision has been made. It didn’t identify a potential target.

Founded in 1907, Protective life has added clients across the U.S. with 47 acquisitions of smaller insurers and blocks of policies from other firms over more than four decades, according to its website. It agreed last year to a $1.1 billion transaction to add U.S. policies from Axa SA.

Protective Life, with a stock-market value of $4.12 billion at the end of last week, is led by Chief Executive Officer John D. Johns. Management would probably remain in place after a deal, according to Nikkei. Eva Robertson, vice president for investor relations at Protective Life, said in an e-mail that the company doesn’t comment on rumors.

Japanese Acquisitions

Protective Life advanced 33 percent in the past year to $52.30 at the end of last week, as investors bet the deal with Paris-based Axa would add to earnings. Operating profit increased 35 percent in the first quarter to $96.5 million, Protective Life said last month.

Japanese financial firms have looked to other U.S. insurers to acquire units or stakes. Orix Corp., the Tokyo-based finance and leasing firm, agreed in April to pay about $895 million for Hartford Financial Services Group Inc.’s Japanese retirement- products business.

Nippon Life Insurance Co. invested in Newark, New Jersey- based Prudential Financial Inc. amid the financial crisis. In 2008, Tokio Marine Holdings Inc. said it would buy commercial insurer Philadelphia Consolidated Holding Corp. in a $4.7 billion deal.