* Says deal price yet to be agreed, sources say around $2.5 bln
* First major shakeup in Japan’s life insurance market in 11 years
* Nippon Life to take an 85 pct stake in Mitsui Life (Adds executive comment and details)
By Taiga Uranaka
TOKYO, Sept 11 (Reuters) - Japan’s largest private life insurer Nippon Life Insurance Co said on Friday it would buy smaller rival Mitsui Life Insurance Co in the first major deal involving local life insurers in just over a decade.
The insurers said they have not agreed on the final price of the deal, but people with knowledge of the matter said Nippon Life would likely pay around 300 billion yen ($2.5 billion) for an 85 percent stake in Mitsui Life.
Nippon Life, which has about $513 billion in assets, said it expects the deal to close by end-March. Under the terms, Nippon Life will buy all of Mitsui Life from a group of shareholders and then sell a 15 percent stake to companies including Sumitomo Mitsui Banking Corp and Sumitomo Mitsui Trust Bank.
“The Japanese life insurance market is a mature one, but there is room for growth,” Nippon Life President Yoshinobu Tsutsui told reporters. The deal is the first involving Japanese insurers since merger that created Meiji Yasuda Life Insurance Co in 2004.
Mitsui Life offers products that are sold at banks and insurance brokers, an area in which Nippon Life lags its rivals.
Major Japanese life insurers have traditionally hired female sales agents to market their products to entire neighbourhoods, but a growing number of customers now prefer to buy insurance at brokers or banks, where they can compare policies.
Nippon Life has previously said it could spend up to 1.5 trillion yen on acquisitions and investments at home and abroad over the next 10 years. Japan’s declining population, however, is forcing more insurers to look abroad for growth. ($1 = 120.4900 yen) (Reporting by Taiga Uranaka; Editing by Chang-Ran Kim and Miral Fahmy)