PARIS/LONDON :Japanese insurer Dai-ichi Life will take a 15 per cent stake in British financial group M&G and has agreed a long-term partnership, sending shares in M&G sharply higher and marking the latest overseas foray by a Japanese firm.
The tie-up, in which Dai-ichi Life becomes M&G’s biggest single shareholder, is expected to deliver at least $6 billion of new business for M&G and $2 billion of new business for Dai-ichi Life over the next five years, M&G said on Friday.
M&G shares rose more than 8 per cent in early trading, hitting their highest since June 2021.
The two companies will “pursue opportunities to co-invest in new asset management capabilities” under the tie-up, and M&G will become Dai-ichi Life’s preferred asset management partner in Europe as part of the deal.
Asset management has seen a spate of consolidation and collaboration deals in recent years as firms try to bulk up in order to compete with U.S. giants like BlackRock and Vanguard.
Japanese firms have also become more active in the insurance and asset management market outside of Japan, with British rival Legal & General announcing a tie-up with Meiji Yasuda in February, while DWS is in talks to form a joint venture with Nippon Life in India, Reuters reported this month.
Andrea Rossi, group CEO of M&G, said that the partnership would enable it to capitalise on “significant private market opportunities across Europe” and give it greater access to the Japanese and Asian market.
Under the deal, Dai-ichi Life will have the right to appoint a director to the board of M&G for as long as it holds at least a 15 per cent shareholding, the British company said.
M&G was previously considered a takeover target and in 2023 was linked with a potential bid by Australia’s Macquarie, which the British money manager at the time dismissed as speculative. Active asset managers have come under pressure from inflation and from investors turning to passive investment funds, which charge lower fees.
M&G reported an unexpected rise in annual profit in March, helped by cost-cutting and growth in its asset management business.
Rossi told Reuters in 2023 that he was determined not to break up the business.
Dai-ichi Life earlier in May said it would raise its stake in UK-based Capula Investment Management to 15 per cent, from just under 5 per cent, and in April announced an agreement to buy a 15.1 per cent stake in Australian investment manager Challenger for around $550 million.
