Meiji Yasuda Life Insurance Co, Japan's second-largest life insurer, has agreed to purchase a 15% stake in Thai Life Insurance Plc.
The move highlights Japanese financial institutions' keen interest in the fast-growing Southeast Asian market amid lacklustre growth at home.
The 2016 launch of the Asean Economic Community (AEC) is also luring foreign investors to expand their turf into the region.
Both Meiji Yasusda and Thai Life, the country's fourth-largest life insurer by total premiums, did not disclose the deal value, but Bloomberg quoted an unnamed source as saying the deal is worth 70 billion yen (22.1 billion baht).
''Leveraging Meiji Yasuda Life's expertise in international life insurance, product development, distribution channels and technology, the partnership will strengthen Thai Life's efforts to achieve growth and to enhance its capabilities in the AEC market,'' Thai Life president Chai Chaiyawan said.
''The management philosophy of the company will remain unchanged post the transaction.''
The Chaiyawan family is Thai Life's largest shareholder.
''The strategic partnership will help Thai Life to take full advantage of the rapid growth of the economy and the life insurance industry in Asean,'' said Mr Chai.
Barclays serves as the sole financial adviser, while Baker & McKenzie is the legal adviser to Thai Life for the transaction.
Thai Life Assurance Association data said Thai Life at the end of the first quarter controlled an 11.1% market share of the Thai life market with premiums of 12.1 billion baht.
Its ranking fell to fourth from second last year, when it had 12.5% of the sector.
Following the completion of the deal, Meiji Yasuda Life will not change Thai Life's management structure.
At the end of last year, Thai Life had assets of 202 billion baht and reserves of 160 billion.
In 2012, Thai Life generated first-year premiums of 12.4 billion baht, up by 40% from 2011.
About the author
- Writer: Post Reporters