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Major U.S. insurance company American International Group Inc. has reached a basic agreement to acquire GE Edison Life Insurance Co., a Japanese life insurance unit of the General Electric group, it was learned Wednesday.

GE Edison will be AIG’s third life insurance unit in Japan, following ALICO Japan, the Japanese arm of American Life Insurance Co., and AIG Star Life Insurance Co.

The takeover will make AIG’s outstanding balance of contracts the eighth highest among Japan’s life insurers. It is currently 10th. The move will also expand the size of AIG’s annual life insurance premium revenues, moving it to sixth from 10th in the country on this list.

The group will become larger than such domestic life insurers as Asahi Mutual Life Insurance Co. and Mitsui Mutual Life Insurance Co., and the takeover may spark further realignment in the industry.

AIG’s move reflects the financial group’s aim to expand its presence in the Japanese market.

AIG entered the Japanese life insurance market in 1973 with the launch of ALICO Japan and has expanded its operations on the back of its strong financial standing and the development of new sales measures.

It also boosted its operations by launching AIG Star, which took over the failed Chiyoda Mutual Life Insurance Co.

GE Edison inherited the operations of failed Toho Mutual Life Insurance Co., but the company’s performance has been lackluster.

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