Extending its quest for
international investment opportunities, Nippon Life, Japan’s
largest life insurer, has announced that it is to invest €500m
($710m) in European insurer Allianz.
The investment is to be made
through the purchase of 30-year convertible subordinated notes
issued by an Allianz subsidiary Allianz Financial II. The notes are
convertible into Allianz ordinary shares any time within 10 years
of their issue.
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Nippon Life’s purchase of Allianz
notes is its second significant foreign investment this year. In
March the Japanese insurer announced that it was to acquire a 26%
stake in Indian life insurer Reliance Life in a $680m deal, the
largest foreign direct investment yet in India’s financial services
industry.
Nippon Life also has a significant
stake in the US’ second largest life insurer Prudential Financial
through the US insurer’s unit Prudential Insurance Company of
America.
The investment, a $500m 10-year
exchangeable surplus note, was bought by Nippon Life in late-2009
and can be converted into Prudential Financial ordinary shares at
any time, at Nippon Life’s option, beginning on the fifth
anniversary of issuance of the note.
Including ordinary shares already
held by Nippon Life, conversion of the note would give it a total
stake in Prudential Financial of between 1% and 2%.
Nippon Life also holds a 7% stake in US financial conglomerate
Principal Financial Group and a 5% stake in Russell Investments, a
unit of US insurer Northwestern Mutual.
