Dai-Ichi Life Plans $11 Billion IPO

123jump.com Staff
25 Dec, 2008
New York City

The second largest life insurer in Japan plans to demutualize the company and raise $11 billion in a global offering. The 106 year old insurance company is looking to improve its investment returns. The 11 trillion yen offering will be managed by Nomura Holdings, Merrill Lynch and Mizuho Financial.

[R]2:00PM New York – Dai-Ichi Life announces a plan to demutualize and raise as much as $11 billion in a global offering.[/R]

Dai-Ichi Mutual Life Insurance Company announced to demutualize the company and list its stock on Tokyo Stock Exchange next year. The second largest life insurer is battling growing foreign competition, falling investment returns and ageing population in Japan.

The life insurance company plans to raise 1 trillion yen (or $11 billion) in a global offering that will be managed by Nomura Holdings, Merrill Lynch and Mizuho Financial Group, according to sources in New York and Tokyo.

The stock is expected to be listed on the TSE in April 2009 and the company estimates market value as high as 3 trillion yen.

The company’s current head quarter in Tokyo served as the General Headquarters of the Allied Powers after the World War II.

All policy holders totaling 8.4 million with 11.2 million policies are likely to get stocks in the offering based on their contributions and on record as of March 31, 2009. Total amount of insurance coverage of these policies is $1.7 trillion.

The insurance company manages 31.8 trillion yen or $350 billion and has a global investment foot print. For the six months ended in September, the company collected premium of 1.48 trillion yen and net surplus from operations was 96 billion yen.

The company holds no direct investment in leveraged or structured sub-prime assets but has exposure to hedge funds that are exposed to these securitized investments. As of June of this year, the company has invested 1.4 trillion yen in securitized products that were at that time down 26.3%.

The insurance company was established on September 15, 1902 and has 52,000 employees.