Japan’s largest life insurer will make its Bermudian equity affiliate, Resolution Life Group Holdings Ltd, its wholly owned subsidiary ― acquiring the remaining shares from the firm’s investment limited partnership for $8.2 billion.
Nippon Life Insurance Company already holds a 23 per cent stake and the new transaction values Resolution Life at $10.6 billion.
Resolution Life Group Holdings Ltd and Resolution Re were established at Wessex House on Reid Street in Hamilton in 2017.
Nippon Life had already been the largest shareholder, but the announcement of the complete acquisition led Fitch Ratings to place the ‘BBB’ Long-Term Issuer Default Ratings of Resolution Life Group Holdings Ltd and RLGH Finance Bermuda (collectively, Resolution Life) on Rating Watch Positive.
Fitch has also placed the ratings of Resolution Life’s core operating subsidiaries in North America and Asia Pacific on Rating Watch Positive, including Security Life of Denver Insurance Company, Resolution Re, Resolution Life Australasia Ltd and Resolution Life New Zealand Limited.
Fitch said: “The Positive Watch reflects Fitch’s view of Resolution Life’s potential strategic importance to Nippon Life, and expectation of uplift due to the stronger credit quality of its new sole owner. Nippon Life is the largest life insurance company in Japan and ranks as one of the largest life insurers globally.
“The transaction reflects a broader strategic initiative by Nippon Life to expand its life insurance business outside of Japan.”
Fitch expects Resolution Life’s existing management team and operating strategies to largely remain in place following the close of the transaction.
As part of the transaction, Nippon Life reached an agreement to acquire the remaining 20 per cent of the shares in MLC Life Insurance that it does not already own from National Australia Bank Limited and enter into a business integration of MLC and Resolution Life Australasia Limited.
Resolution Life is a global insurance group focusing on the acquisition and management of portfolios of life insurance policies.
Nippon Life said it aims to expand in the large and growing US life insurance market as well as further enhancing its Australian life insurance business through the integration.
The company said the overall transaction is part of an aim to achieve long-term stable growth in overseas business profit and, ultimately, to maximise benefits of its policyholders.
A Nippon Life statement said: “Resolution Life has formed a strategic partnership with global asset manager Blackstone Inc, in which Blackstone has been Resolution Life’s investment management partner for directly originated assets across the private credit, real estate and asset-based-finance markets ― reflecting the significant value Blackstone’s origination platform has provided to the business and its policyholders. This strategic partnership will continue after the transaction.”
The transaction is subject to customary closing conditions, including required regulatory approvals, and is expected to take place in the second half of 2025.
Nippon Life will make an in-kind contribution of the MLC shares to Resolution Life NOHC Pty Ltd, Resolution Life’s Australian holding company. In exchange, Nippon Life will acquire the new shares issued by Australian NOHC.
This transaction is expected to be executed on the business day following the completion of the main transaction.
As a result of this transaction, Nippon Life will directly hold 51 per cent of the voting rights of Australian NOHC (Nippon Life will indirectly hold 49 per cent through Resolution Life), and Australian NOHC will encompass both Resolution Australasia and MLC as its subsidiaries, thereby integrating the management of Resolution Australasia and MLC.
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Publish date : 2024-12-11 21:01:00
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