Dai-ichi Life in advanced talks to buy U.S. insurer Protective Life: source

TOKYO Sun Jun 1, 2014 8:42pm EDT

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TOKYO (Reuters) - Japanese insurer Dai-ichi Life Co is in advanced talks to buy Protective Life Corp of the United States, a source with direct knowledge of the matter said, in a deal likely to be worth over $5 billion, the biggest acquisition by a Japanese insurer.

Dai-ichi Life, Japan's second-largest private-sector life insurer, plans to buy 100 percent of Birmingham, Alabama-based Protective Life, said the source, who was not authorized to discuss the matter publicly. If completed, the deal would be the latest in a string of overseas acquisitions by Japanese insurers, seeking to offset weak future prospects at home amid a rapidly ageing 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 top 500 billion yen ($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 to Reuters that the company declined to comment, citing company policy on media reports.

In early Tokyo trading Dai-ichi Life shares fell 4 percent, while the benchmark Nikkei 225 index was up 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 among 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 ended in March, Dai-ichi Life was the only major life insurer to post growth in insurance premium revenue, boosted by its Australian unit. Sluggish domestic business weighed on 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.

(Reporting by Taiga Uranaka; Additional reporting by; Gregory Roumeliotis; Editing by Richard Pullin and Kenneth Maxwell)

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