Sompo Japan Insurance Inc., a unit of Japan’s third-largest casualty insurer group by market value, is considering buying the U.K.’s Canopius Group Ltd. as it continues an overseas expansion.
The acquisition is under review, and no decision has been made, parent NKSJ Holdings Inc. said in a statement today, without giving further details. Sompo will use 100 billion yen ($969 million) of its own capital to buy 100 percent of the U.K. company and plans to complete the deal next year, the Nikkei newspaper reported earlier today, without saying where it obtained the information.
This would be NKSJ’s first foreign acquisition since June, when it paid the equivalent of 9 billion yen ($87 million] to make Brazil’s Maritima Seguros SA a consolidated subsidiary, according to data compiled by Bloomberg. Overseas operations last fiscal year contributed 6.2 percent of the group’s property and casualty net premiums, data on NKSJ’s website show.
NKSJ last month more than doubled its profit forecast to 72 billion yen [$698 million] for the full year ending March 31, a 65 percent increase from the previous fiscal period and the most since Sompo Japan and Nipponkoa Insurance Co. combined under the holding company three years ago, data compiled by Bloomberg show.
Overseas subsidiaries accounted for 6.5 billion [$63 million] of the group’s 29.1 billion yen [$282 million] net income in the six months to Sept. 30, compared with 19.9 billion yen [$193 million] from Sompo Japan and Nipponkoa, NKSJ said in a statement on Nov. 19.
Canopius employs about 560 people with operations in the U.K., Ireland, Switzerland, the U.S., Singapore and Australia offering property, casualty, marine, energy, and specialty insurance, according to a fact sheet on its website. Gross written premiums totaled £692 million ($1.128 billion) in 2012, the data show.
Overseas acquisitions by Japanese companies this year are valued at $46.3 billion across 657 deals, with Mitsubishi UFJ Financial Group Inc.’s $5.6 billion purchase of Thailand’s Bank of Ayudhya Pcl topping the rankings, Bloomberg-compiled data show. That compares with $112.3 billion in the same period last year, led by SoftBank Corp.’s $21.6 billion purchase of Sprint Corp.
–Editors: Jim McDonald, Garry Smith
Topics Mergers & Acquisitions Japan
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