Nippon Life Insurance Of Japan Signs Binding Definitive Agreements With Reliance Capital
NIPPON LIFE INSURANCE OF JAPAN SIGNS BINDING DEFINITIVE AGREEMENTS WITH RELIANCE CAPITAL TO INCREASE STAKE IN RELIANCE NIPPON LIFE ASSET MANAGEMENT TO 75%
NIPPON LIFE INSURANCE, A FORTUNE 500 COMPANY, IS ONE OF THE LARGEST LIFE INSURERS IN THE WORLD MANAGING ASSETS OF OVER US$700 Bn
RNAM EXPECTS TO ENJOY SUBSTANTIAL BENEFITS AND INCREASED AUM BASED ON NIPPON LIFE’S LEADERSHIP IN JAPAN AND ITS GLOBAL RELATIONSHIPS AND BEST PRACTICES
ACQUISITION OF RNAM SHARES AT Rs 230 PER SHARE, ACCOMPANIED BY MANDATORY OPEN OFFER TO THE PUBLIC
AMONGST THE LARGEST FOREIGN DIRECT INVESTMENTS IN INDIA’S FINANCIAL SERVICES SECTOR
RNAM TO BECOME THE LARGEST FOREIGN OWNED AMC IN INDIA
PROPOSED TRANSACTION SUBJECT TO NECESSARY REGULATORY APPROVALS
Nippon Life Insurance of Japan has that announced it has signed binding definitive agreements with Reliance Capital Ltd to increase its stake in Reliance Nippon Life Asset Management Ltd (RNAM) to 75 per cent. Both partners currently hold 42.88 per cent each in the company, while the rest is with public shareholders.
Reliance Capital will exit its entire RNAM shareholding to Nippon Life Insurance, and Offer For Sale to other financial investors to ensure the minimum free float requirement of 25 per cent is also met.
NLI will make the mandatory open offer at Rs. 230 per share, in accordance with the SEBI Takeover Regulations.
The open offer price represents a premium of 15.5% to the minimum 60-day price as determined under the SEBI Takeover Regulations.
Nippon Life Insurance, a 130-year old company, is one of the largest life insurance companies in Japan, managing assets of over US$ 700 Bn. Nippon Life Insurance has revenues of over US$ 70 Bn and core operating profit of US$ 6.8 Bn. Nippon Life Insurance has the largest market share in Japan among private life insurance companies, employing over 70,000 employees and serving nearly 14 million customers worldwide. Total assets managed by Nippon Life Insurance are twice the size of the Indian mutual funds industry.
Nippon Life Insurance had made initial investment in RNAM in 2012 and has remained confident about growth of the Indian economy and the asset management business. Nippon Life Insurance has shown complete faith and commitment in the leadership team of RNAM led by Executive Director & CEO Sundeep Sikka, who will continue to lead the company. The company will continue to run its operations as is without any change in structure and management.
“Nippon Life views its India employees and the management team of the asset management business led by Sundeep Sikka as its joint partner in India. They have contributed significantly for the successful track record of business over the years. As existing shareholders, we are very confident that current management team will continue to take this journey forward which started many years back,” said Yutaka Ideguchi, Director and Managing Executive Officer, Nippon Life Insurance.
“I am delighted that Nippon Life Insurance has chosen to increase its holding in the company. They have been very supportive shareholders and this transaction will ensure continuity in strategy. I am confident that we will continue to benefit from Nippon Life’s leading practices in risk management and leverage its global network to significantly enhance capital inflows into India,” said Sundeep Sikka, CEO and Executive Director, RNAM.
Nippon Life’s total investment in RNAM will be over Rs. 7,800 crore and over Rs. 5,000 crore in Reliance Nippon Life Insurance Co. Ltd., cumulatively adding up to over Rs. 12,800 crore, amongst the largest FDI investments into India in the financial services sector.