CANBERRA: National Australia Bank Ltd. said it’s seeking a partnership with Nippon Life Insurance Co., a day after a person familiar with the discussions said the Japanese company was in talks to buy the Australian lender’s insurance business.
The companies agreed on a non-binding memorandum of understanding with an aim to enter a “long-term partnership,” National Australia said Thursday in a statement that stopped short of mentioning whether anything will be sold. Discussions are ongoing and nothing has been decided, it said.
Nippon Life, Japan’s biggest life insurer by assets, is targeting an agreement this month that may see it pay 200 billion yen ($1.7 billion) to 300 billion yen for National Australia’s insurance business, a person with knowledge of the deal said Wednesday. A transaction would add to the series of overseas takeovers by Japanese insurers as they try to offset slowing growth prospects amid an aging population at home.
“It’s likely that National Australia will restrict itself to distributing life insurance products, while Nippon Life will underwrite the policies, provide the capital and take the premiums,” Brett Le Mesurier, a Sydney-based analyst at APP Securities Pty, said by phone. “It shows National Australia is finally working out what it’s good at, which is being an Australia and New Zealand bank. A transaction will be sensible for shareholders.”
