Meiji Yasuda Life Insurance Co., Japan’s third-biggest life insurer, said it agreed to buy a 15 percent stake in closely held Thai Life Insurance Pcl to meet rising demand in the Southeast Asian nation.
The deal is worth about 70 billion yen ($707 million), one of two people briefed on the transaction said earlier, asking not to be identified as the process is private. Meiji Yasuda will appoint one director to the board of Thai Life, the Japanese insurer said in the statement posted on its website. The statement didn’t give a value for the deal.
Insurers from London to Tokyo, attracted by Southeast Asia’s emerging middle class, have spent over $6 billion acquiring assets in the region over the past two years, data compiled by Bloomberg show. Japan’s Dai-ichi Life Insurance Co. agreed to buy 40 percent of PT Panin Financial Tbk’s life insurance unit in Indonesia for 3.3 trillion rupiah ($330 million) in June.
The sale values Thai Life at a multiple of 5.9 times the value of its net assets at the end of March, more than double the average of 17 publicly traded Thai insurers, according to data compiled by Bloomberg. Bangkok Life Assurance Pcl is valued at 3.49 times book value, the data show.
Tokyo-based Meiji Yasuda is building its overseas insurance business and seeking to expand in markets including Asia and South America, according to its website. In Indonesia, Meiji increased its shareholding in PT Avrist Assurance from 5 percent to 23 percent in May last year.
Bangkok-based Thai Life, which was founded in 1942, offers products including traditional life, annuities and accident and health insurance, according to the statement. It had premium income of 48.8 billion baht ($1.6 billion) in fiscal 2012, it showed.
Barclays Plc advised Thai Life on the deal.