Boston, MA 06/04/2014 (wallstreetpr) – Protective Life Corp. (NYSE:PL) will be acquired by Dai-ichi Life Insurance Co. for $5.7 billion. It will be the largest acquisition by a Japanese insurer. Dai-ichi life is the second largest private sector life insurer in Japan. It wants to expand its operations overseas to compensate the falling revenues in the domestic market. The deal is subjected to the approval by the shareholders and regulators.
The offer
Dai-ichi Life will buy Protective Life Corp. (NYSE:PL) for $5.7 billion. It has plans to issue up to $2.4 billion in the form of new shares. It will act as a support to finance the largest deal of the insurer. The company has no intentions of changing the management of Protective Life. It considers the management to be doing well in its sector. They generated the premiums and policy fees of $2.98 billion. The company reported a net income at $393 million in 2013.
The purpose of the deal
Dai-chi Life is not having a good time back at home. It has to deal with the higher payments resulting out of the ageing population in Japan. The need was to find effective ways to extend its operations to compensate the weak growth in the domestic market. The best way was to buy a potential asset in the other performing markets. As of now, the insurer market in the US and the Southeast are booming. Dai-chi has joined the growing market by acquiring Protective Life Corp. (NYSE:PL) for $5.7 billion.
Terms of the deal
As per the deal, Dai-chi Life will acquire 100% stake of Protective Life. It will pay $70 per share to acquire Protective Life Corp. (NYSE:PL). The buy price is at a premium of 35% to the average share price of Protective in the last one month. The deal is expected to close by the end of year 2014.
