Japan Post to invest $2.6 billion in U.S. insurer Aflac: source

FILE PHOTO: Japan Post's logo is seen at its headquarters in Tokyo, Japan, January 30, 2017. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - Japan Post Holdings Co 6178.T is planning to invest about $2.6 billion in Aflac Inc AFL.N, aiming to become the largest shareholder in the U.S. insurer, a person familiar with the matter said.

Japan Post, a conglomerate that spans postal delivery, banking and insurance services, plans to initially acquire a 7 to 8 percent stake in Aflac for about 300 billion yen ($2.6 billion), said the person.

Under the deal Japan Post can increase its stake to a maximum 20 percent in four years time, the person said. Aflac’s current largest shareholder is Vanguard Group Inc with a 8.77 percent stake, according to data from Refinitiv Eikon.

Aflac said in a statement it was engaged in discussions with Japan Post regarding a potential minority investment in Aflac but the discussions did not involve Aflac or any of its subsidiaries becoming a member of Japan Post Group.

Aflac did not elaborate further. A spokesman at Japan Post declined to comment.

The transaction, which is expected to be announced this month, will follow the agreement made in 2013 between Japan Post and Aflac which allows Aflac to sell its cancer insurance at Japan Post’s offices across Japan.

The news was earlier reported by the Nikkei business daily.

Reporting by Junko Fujita and Taiga Uranaka; editing by Darren Schuettler, Elaine Lies and Kirsten Donovan