Meiji Yasuda Life Insurance Company has entered into a definitive agreement to acquire StanCorp Financial Group (The Standard).
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Meiji Yasuda will buy all outstanding shares of StanCorp for $115 per share in cash, a 50% premium to StanCorp’s share price as of Thursday’s close and 49.9% premium to its one-month-weighted average share price.
In June, Tokio Marine Holdings agreed to buy US specialty insurer HCC Insurance Holdings for $7.5bn in a deal, which is touted as the biggest in 2015 by a Japanese company.
StanCorp has lately benefited from greater premiums and enhancements in individual-disability phase.
Meiji Yasuda deputy president Hiroaki Tonooka said the purchase price was appropriate considering StanCorp’s growth potential.
The unlisted life insurer is set to announce the deal on Friday, the source said, declining to be identified because the decision is not yet public. “We will position StanCorp as an important base in the US market that is the largest in the world and is expected to see mid- and long-term stable growth”.
The acquisition has been unanimously approved by the StanCorp board, but it still requires approvals from StanCorp shareholders and regulators in both the US and Japan.
“Japanese insurers including Nippon Life and Dai-Ichi Life are likely acquirers of U.S. life insurance properties”, Sean Dargan, an analyst at Macquarie Group Ltd., said in a note Wednesday. Harbolt sold 6,888 shares of StanCorp Financial Group stock in a transaction that occurred on Monday, April 27th. That compares with a 1.2 percent drop for the Bloomberg Industries North America Life Insurance Valuation Peers Index. The parties expect to complete the transaction in the first quarter of calendar year 2016.
So what: Facing poor demographic trends domestically, Japanese life insurers are tapping into the United States to grow their business.
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Image: Meiji life insurance building in Marunouchi, Tokyo, Japan.
