Wealthy Japanese financial firms are setting their sights on the Southeast and are purchasing heavily.
The latest trend in the life insurance industry is in Southeast Asia, where Japanese companies have already spent $6.6 billion this year – much of it in that sector – as they purchase one firm after the next.
The latest reports have indicated that another massive acquisition of this nature is about to be made.
These reports are indicating that Meiji Yasuda is looking into making an offer of $700 million for Thai Life insurance, an unlisted company. It also appears that this will be far from the last. Japanese companies have been following the trend of shopping in foreign markets for some time now. Last year, Japanese M&A spent a record breaking $112 billion in foreign destinations.
It is in the life insurance arena, more than any other, that these Japanese businesses are laying down their cash.
A recent report from Reuters said that Meiji Yasuda Life insurance company has entered into exclusive talks with Thai Life in order to take on a 15 percent stake in the company. This, after squeaking ahead of another company from the same country, Sumitomo Life.
Although it may appear that the total outbound mergers and acquisitions from Japan has actually fallen by 67 percent when compared to 2012, in the specific region of Southeast Asia, things are only just picking up. Over the last few months, 40 percent of Panin Life in Indonesia was plucked up by Dai-ichi Life for $337 million. It is expected that the BBNI life insurance unit in Indonesia will soon receive a bid by Sumitomo.
That said, while life insurance has certainly been the most appealing plum, it is not alone in Japan’s outbound purchasing. They have also been seeking Southeast Asia’s banks. For example the plans to purchase a stake of 51 percent of the Bank of Ayudhya in Thailand are just being finalized by Mitsubishi UFJ, at a price of $4 billion. Moreover, Sumitomo Mitsui Financial has already agreed to purchase 40 percent of BTPN in Indonesia for $1.5 billion. All of this has occurred exclusively this year.