Japanese life insurance company Nippon Life Insurance has secured approval from the Competition Commission of India (CCI) for increasing its stake in Reliance Nippon Life Asset Management (RNAM) up to 75%.


Image: Nippon Life Insurance headquarters in Chuo-ku, Osaka. Photo: courtesy of 663highland/Wikipedia.org.

In May 2019, Nippon Life agreed to acquire an additional stake of 32.125% in RNAM from Reliance Capital and public shareholders for INR45.2bn (£530m). Prior to the deal, both the Japanese company and Reliance Capital held a 42.88% stake in RNAM, while the remaining stake is owned by public shareholders.

The CCI tweeted: “CCI India approves acquisition of up to 75 per cent stake in Reliance Nippon Life Asset Management Ltd by Nippon Life Insurance Company.”

The approval from CCI allows the Japanese life insurer to make an open offer to the public shareholders of RNAM at INR230 (£2.67) per share, as needed under SEBI regulations, and attain the maximum permissible promoter shareholding of 75% for listed firms.

The Japanese company’s open offer, which will be from 23 July to 5 August, will be for acquiring a maximum of 25.33% of the expanded voting share capital of RNAM, reported The Hindu BusinessLine.

Apart from RNAM, the Japanese firm, through its investment in Reliance Nippon Life Insurance, is engaged in the Indian life insurance market. The Japanese insurer said that it continues to aim for stable and sustainable growth of Reliance Nippon Life Insurance by offering its experience and expertise to the Indian company.

In November 2015, Nippon Life signed a deal with Reliance Capital to acquire an additional 23% stake in Reliance Life Insurance for INR22.7bn (£260m). The deal increased the Japanese firm’s stake from 26% to 49% in Reliance Life Insurance, which was subsequently renamed as Reliance Nippon Life Insurance.

Last month, the Japanese company agreed to acquire a stake of 35% in Myanmar-based Grand Guardian Life Insurance (GGLI) from Grand Guardian Insurance for $21m (£16.85m). Upon closing of the acquisition, GGLI will be renamed as Grand Guardian Nippon Life Insurance.

In March 2018, the Japanese insurer signed a deal to acquire an 85.1% stake in MassMutual Japan, the Japanese subsidiary of MassMutual International, for $935m (£750m). MassMutual International will retain the remaining stake of 14.9% of the stake in MassMutual Japan.