Dai-ichi Life Establishes Two Australian Subsidiaries Following Approval for Tower Australia Buy

Dai-ichi Life Insurance Co. Ltd. won approval to acquire the remaining 71.04% of Tower Australia it doesn't yet own and to set up two local subsidiaries in Australia.

The Japanese life insurer received regulatory approval from the Foreign Investment Review Board of Australia for its proposed acquisition of the remaining shares in a local life insurer Tower Australia, according to Tower.

Tower Australia is currently 28.96%-owned by Dai-ichi Life. The acquisition of the remaining shares is subject to approvals by the Japanese and Australian authorities, and Tower Australia's shareholders, said Dai-ichi Life in a statement.

Establishment of the two subsidiaries will provide a "suitable corporate structure" for the acquisition process, according to applicable laws and regulations, said Dai-ichi Life President Koichiro Watanabe in a statement.

The two subsidiaries -- TAL Dai-ichi Life Australia Pty. Ltd., wholly owned by Dai-ichi Life; and TAL Dai-ichi Life Group Pty. Ltd., wholly owned by TAL Dai-ichi Life Australia Pty. Ltd. -- will be headquartered in New South Wales, Australia, according to the Japanese insurer.

The transaction will be executed through the two subsidiaries, subject to necessary procedures, said Dai-ichi Life.

Dai-ichi Life in December agreed to purchase the remaining 71.04% stake in Tower Australia for A$1.193 billion (US$1.2 billion) with an offer of A$4 per share.

"Dai-ichi has a strategy to increase its geographic diversification in the Asia/Pacific region," said Takayuki Kotani, general manager of international business management at Dai-ichi Life. The Tokyo-based insurer is seeking to expand overseas business mainly in Asia, leveraging its more than 100 years of experience in Japan's life sector (BestWire, Dec. 29, 2010).

Dai-ichi Life said it has provided special services for policyholders affected by the earthquakes centered in Tohoku and northern Nagano Prefecture in Japan in March 2011, including extending premium payments by six more months and simplifying claims procedures.

The company also decided not to apply normal earthquake exemption clauses to policyholders covered by accidental death benefits and/or accidental hospitalization benefits who were affected by the earthquake.

(By Rebecca Ng, Hong Kong news editor: [email protected])