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Friday May 19, 4:25 PMMillea Holdings to acquire affiliate Nisshin FireTOKYO, May 19 (Reuters) - Millea Holdings Inc. , Japan's biggest general insurer, said on Friday it will take control of its affiliate Nisshin Fire & Marine Insurance Co. by buying the roughly 70 percent of Nisshin's shares it does not already own for about $730 million.By acquiring Nisshin, which specialises in small-scale retail insurance sales, Millea hopes to diversify its business range and broaden its customer base, President Kunio Ishihara told a news conference. "We want to build on each other's strengths to bolster the overall Millea group," he said. "We have watched Nisshin's retail business grow steadily." Millea will pay around 81.2 billion yen ($732 million) for the Nisshin shares through a stock swap to be completed on Sept. 30. Nisshin shareholders will receive 0.126 Millea share for each Nisshin share after a 500-for-1 Millea share split. Nisshin's shares jumped 12.6 percent to 555 yen on early reports of the takeover. Millea's offer represents a 5 percent discount to the shares' closing price on Friday. Millea's shares closed up 1.5 percent at 2.09 million yen. The Millea group also includes Tokio Marine & Nichido Fire Insurance Co., a much larger general insurer that formed a capital and operational tie-up with Nisshin Fire in 2003. Ishihara said Millea did not plan to merge the two firms. "It's true there would be advantages to combining their infrastructure, but we think a merger could destroy Nisshin's unique business model," he said. The Millea group's share of Japan's general insurance market is expected to reach 30 percent after the acquisition of Nisshin, which has a 2 percent share. Millea is also expanding its Asian insurance business through joint ventures as well as mergers and acquisitions, and is targeting other emerging markets such as Brazil, Russia, India and South Africa. Tokio Marine said last month it plans to buy all its shares in Singapore-based insurer Asia General Holdings Ltd. in a deal likely worth up to 50 billion yen. In July, Tokio Marine acquired Brazilian casualty insurer Real Seguros SA. It announced in December that it would spend about 7 billion yen for a 24.9 percent stake in Chinese insurer Tianan Insurance Co. Tokio Marine and Nisshin Fire have been cooperating since 2003 to offer new products for wholesale and retail customers and in risk management and joint development of online systems. ($1=110.98 Yen) (Additional reporting by Yuko Inoue and Edwina Gibbs) ($1=110.98 Yen) |
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