Japanese insurance conglomerate acquires 15% stake in M&G
M&G, a leading financial group, has secured a long-term strategic partnership with Dai-ichi Life, one of Japan's largest life insurers. Following the deal, Dai-ichi Life will become M&G's largest shareholder, and the partnership is projected to bring approximately £4.5 billion in business to M&G and £1.5 billion to Dai-ichi Life over the next five years.
The alliance encompasses asset management and life insurance sectors, with M&G being appointed as Dai-ichi Life's preferred asset management partner in Europe. In return, Dai-ichi Life will have the right to appoint a director to M&G's board, as long as they hold at least a 15% stake in the company.
The partnership is expected to boost M&G's position as a standalone competitor, as emphasized by M&G CEO Andrea Rossi, who described the collaboration as "a recognition of M&G’s strengths and clear confidence in our leadership, strategy, and long-term prospects."
The market responded positively to the announcement, with M&G shares reaching their highest level since June 2021. Subsequently, however, some of the gains were lost, and the shares closed 5.5% higher at 236.7p.
This partnership follows a trend of Japanese groups teaming up with UK firms, with Tokyo-based Meiji Yasuda having purchased around 5% of Legal & General in February.
Earlier this month, Dai-ichi Life also increased its stake in UK-based Capula Investment Management to 15% and bought a 15.1% stake in Australian investment manager Challenger for around £408m in April.
Commenting on the partnership, Russ Mould of broker AJ Bell said, "The deal is expected to generate significant business for the company over the next five years." Meanwhile, analyst Philip Kett of Jefferies expressed a positive outlook, stating, "There appear to be no downsides to this partnership, and we expect it to be taken well by investors."
The partnership aims to provide M&G with greater access to the Japanese and Asian markets, strengthening its international growth ambitions and enhancing its ability to compete as a standalone company.
The partnership between M&G and Dai-ichi Life, extending into asset management and life insurance sectors, is anticipated to generate approximately £4.5 billion in business for M&G over the next five years. This strategic alliance may also allow Dai-ichi Life to appoint a director to M&G's board, given their projected 15% stake in the company. Furthermore, the partnership aimed to provide M&G with enhanced access to the Japanese and Asian markets, thereby strengthening its international growth aspirations and increasing its standing as a standalone competitor.
