Dai-ichi Life Co. is in advanced talks to buy U.S. insurer Protective Life Corp., in a deal likely to be worth over $5 billion, making it the biggest acquisition by a Japanese insurer yet.
Dai-ichi Life, the nation’s second-largest private-sector life insurer, plans to buy 100 percent of Birmingham, Alabama-based Protective Life, a source with direct knowledge of the matter said.
If completed, the deal would be the latest in a string of overseas acquisitions by the country’s insurers as they attempt to offset weak future prospects at home amid a rapidly aging population.
In a statement, Dai-ichi Life said, “It is true that we are considering an acquisition of a U.S. life insurance company. But nothing has been decided.” A spokesman declined to comment further.
The Nikkei business daily, which first reported the talks, said a deal would likely be worth over ¥500 billion ($4.9 billion). The U.S. company has a market capitalization of $4 billion and posted a net profit of $393.5 million in 2013.
Eva Robertson, vice president of investor relations at Protective Life, said in an email that she could not comment further, citing company policy on media reports.
Dai-ichi Life shares fell 4 percent in early Tokyo trading, while the benchmark Nikkei 225 index rose 1.3 percent.
Worth nearly $15 billion by market value, Dai-ichi Life has led the way in overseas deals. Acquisitions by the company — the only one of the country’s top four life insurers to be listed — include the buyout of Tower Australia Group for $1.2 billion in 2010 and a 40 percent stake in Panin Life of Indonesia for $337 million in 2013.
For the year ending in March, Dai-ichi Life was the only major life insurer to post growth in insurance premium revenue, boosted by the robust growth of its Australian unit. Meanwhile, sluggish domestic business weighed on the performance of its rivals.
The biggest acquisition by a Japanese insurer so far is Tokio Marine Holdings Inc’s purchase of property and casualty insurer Philadelphia Consolidated Holding Corp. for about $4.7 billion in 2008.
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