Japan's Meiji Yasuda beats PE to Thai Life stake

Meiji Yasuda, Japan's second-largest life insurer by premium income, noted in a statement that Thailand's growing middle income population and relatively low insurance penetration would drive demand for products in the coming years. Thai Life has one of the largest agency forces in the country as well as an extensive distribution network through domestic banks.

As of year-end 2012, Thai Life had a premium income of THB48.8 billion ($1.56 billion), net income of THB3.9 billion and total assets of THB202.2 billion.

This is the fourth financial services acquisition in Southeast Asia by a Japanese group so far this year. It follows Dai-ichi Life Insurance paying $337 million for 40% of Indonesia's Panin Life and Mitsubishi UFJ Financial Group's purchase of a 75% stake in Thailand-based Bank of Ayudhya for $5.6 billion. Meiji Yasuda is also part of the Mitsubishi group of companies.

The fourth transaction saw Sumitomo Mitsui Banking Corp. (SMBC) agree to pay $1.56 billion for 40% of Bank Tabungan Pensiunan Nasional (BTPN), Indonesia's seventh-largest lender. Of this, 32.6% will come from a consortium led by TPG Capital and Northstar Pacific Partners. The group originally paid around $200 million for a 71.6% stake but was subsequently diluted to 57.9% when BTPN went public.

It comes as little surprise that private equity players were outbid in the race for Thai Life. SMBC's 4.5x price-to-book valuation for BTPN is an indication of the pricing levels Japanese financial groups are willing to go for a slice of emerging markets growth to compensate for declining prospects at home.

Barclays advised Thai Life on the deal, while J.P. Morgan is understood to have worked with Meiji Yasuda.

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• Topics
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