Nippon's $3.8B stake in Corebridge could be just the start

Nippon Life Insurance Co. is on the hunt to take stakes in other insurers and asset managers in the US and Asia after it agreed to its biggest-ever M&A deal. 

“We need to pursue further growth overseas,” Managing Executive Officer Minoru Kimura said at a media briefing on Friday. “There are still many opportunities.”

Japan’s largest insurer will buy a 20% stake in Corebridge Financial Inc. for $3.8 billion from American International Group Inc. as it seeks a foothold in the US. The company had been considering a bid for Corebridge since last year, but talks to take a minority stake began in earnest a couple of months ago, Kimura said.

“We are a conservative company. It’s difficult for us to do a deal involving huge amounts of money in a single shot,” he said, when asked why the company did not aim for a majority stake. 

He said the company won’t rule out buying majority stakes in companies in future deals.

Kimura also said his company will look for targets in Europe as well, though he said there are fewer opportunities there than in the US.

Nippon Life has said it is seeking targets at home and overseas to diversify beyond its traditional domestic life insurance businesses. The company’s track record for overseas acquisitions, however, is mixed.

In 2016, Nippon Life bought National Australia Bank Ltd.’s life insurance unit for A$2.2 billion ($1.5 billion). The Japanese company was forced to make multiple rounds of additional capital injection to prop up the unit’s financial health after it suffered losses following the acquisition.  

Kimura said securing talent is a challenge for the company to expand its overseas businesses.

“We are a very domestic company,” he said. “We will boost human resources necessary for global businesses, like by hiring outside talent, including non-Japanese people.”