Nippon Life to buy $725 m of Allianz bonds
Nippon Life Insurance Tuesday said it will invest around 500 million euros ($725 million) in German insurer Allianz, as the Japanese firm looks to expand globally to find growth opportunities.
Japan's largest life insurer by revenue said it will spend the money, approximately 60 billion yen, on 30-year convertible subordinated bonds issued by an Allianz subsidiary, that can be converted into shares.
The transaction will be completed by July 7 and by exercising the conversion right, Nippon Life will be able to obtain Allianz common shares at any time within next 10 years, it said.
Based on current share prices, Nippon Life could end up with a stake of between one and two percent in Germany's largest insurance group, Dow Jones Newswires reported.
Japan's saturated life insurance sector is looking to expand beyond the nation's borders at a time when the population is shrinking.
"We will seek opportunities to work together in various areas with Allianz through continuous interaction including exchange of personnel," Nippon Life said in a statement.
© 2011 AFP