Nippon Life Insurance Co. and Mitsui Sumitomo Insurance Co. said Wednesday they will link up in life insurance operations in Thailand.
Mitsui Sumitomo, a major nonlife insurer, will conduct a takeover bid for 10 percent of the outstanding shares of Bangkok Life Assurance Ltd., a Thai company owned 16.4 percent by Nippon Life, the two firms said.
Mitsui Sumitomo said it will launch the takeover bid this month, with the procedure expected to be completed by the end of March.
The two companies plan to send three executives -- two from Nippon Life and one from Mitsui Sumitomo -- to be board members in Bangkok Life and tackle sales of insurance products targeting Japanese-affiliated companies in Thailand.
Nippon Life and Mitsui Sumitomo will strengthen their Asian operations because sizable growth is not expected in the domestic insurance market due to the long economic slump. Insurance demand is booming in Thailand and other parts of Asia, industry sources said.
Nippon Life acquired a 9.45 percent interest in Bangkok Life in 1997, raising the stake to 16.4 percent in December. The latest takeover plan by Mitsui Sumitomo will boost the combined interest by the two Japanese companies in the Thai insurer to about 25 percent.
Foreign companies are allowed to own a combined share of up to 25 percent in a Thai life insurance company.