Dai-Ichi Mutual Life Insurance APRA Approval

Submitted by Share Trading on 5 March, 2010 - 07:40

Japanese life insurance group, Dai-Ichi Mutual Life Insurance received approval from the Australian Prudential Regulation Authority (APRA) to increase is ownership of Tower Australia (TAL) from its existing 29.7 percent to 49.9 percent without having to seek approval from the Foreign Investment Review Board. Their current stake was bought in August 2008 when Tower was at $3.75 per share, yesterday's close was at $2.52 per share. Tower is Australia's fourth-largest life insurer, behind National Australia Bank-MLC, CommInsure and ING.

The APRA approval gives the Japanese life insurance group, Dai-Ichi, the opportunity to increase it's stake either by "creeping" whereby the firm acquires up to 3 percent of the company in any six month period or by underwriting a capital raising. However, any short term moves in Australia may be prevented by the current demutualisation process and listing on the Tokyo Stock Exchange by Dai-Ichi. While that may be the case in the short term, the company is likely to seek to expand its presence in Australia in the long term.