Dai-ichi Life Completes Tower Australia’s One-Third Acquisition

Dai-ichi Mutual Life Insurance Co. completed acquiring a nearly one-third stake in Tower Australia Group Ltd., becoming the Australian life insurer's major shareholder.

The acquisition was announced last August that Dai-ichi Life agreed to buy 29.7% stake in Tower Australia from British investment company Guinness Peat Group for A$376.3 million (196.1 million euros). The purchase was then scheduled into three stages, and Dai-ichi Life initially bought 19.9% of shares during the first two stages in August.

Dai-ichi Life's final 9.8% acquisition of shares was approved by shareholders of Tower Australia this month, completing the purchase deal with Guinness Peat Group.

Tower Australia Chairman Rob Thomas said the company is "fortunate to welcome Dai-ichi Life" as its largest shareholder amid the current financial turmoil. Dai-ichi Life's investment will enhance Tower Australia's client base and support the company's business development in Australia while maintaining its existing strategy, management and board team, he said.

As one of the world's top 10 life insurance companies in terms of premium income, Dai-ichi Life's investment is "a significant vote of confidence" in Tower Australia, said Thomas in a statement. Tower Australia aims to become Australia's leading life insurance company by 2010, said Jim Minto, Tower Australia managing director, in a presentation.

Tower Australia ranked forth as the largest life insurance company in Australia, accounting for 11% of market share. In the first half of fiscal 2008, Tower Australia posted a 19% jump in underlying profit to A$33.9 million and its in-force premium rose 12% to A$694 million.

Established in 1902, Dai-ichi Life is one of the oldest life insurance companies in Japan, with total assets of 33.6 trillion yen (244.1 billion euros) and 42,568 sales representatives. The publicly-listed life insurer has a solvency margin ratio of 1,161.8% and its fundamental profit increased to 497.8 billion yen in 2007 from 469.5 billion yen in 2006, according to its 2007 financial statement.

With its eyes on established business platforms in developed overseas market, Dai-ichi Life's investment in Tower Australia enhances the Tokyo-based insurer's international development and presence. "This initiative in Australia is part of the company's strategy to expand into business in the overseas life insurance market and follows the company's recent investments in Taiwan, Vietnam, India and Thailand," said Dai-ichi Life president Katsutoshi Saito last August.

(By Iris Lai, Hong Kong bureau manager: [email protected])