Japan's Sompo mulls $1b purchase of Bregal-owned insurer Canopius

Sompo Japan could pay around JPY100 billion ($969 million) for the asset, according to a report by Nikkei yesterday. The Japanese insurer's Tokyo-listed parent company, NKSJ Holdings, later released a statement confirming it was "considering the reported acquisition" but did not refer to Canopius by name.

Canopius is a privately-owned insurance and reinsurance group operating in the Lloyd's of London insurance market. The company operates in Europe, the United States, Singapore and Australia. It had gross written premiums of GBP692 million ($1.13 billion) in 2012 and has 560 employees, according to the company website.

Bregal first invested in Canopius in 2003, eventually committing a total of total EUR52 million ($71.5 million) via Bregal Fund I. The firm then went on to commit a further EUR59 million though Fund II in 2008.

A statement released by Michael Watson, chairman of Canopius, said the company did not comment on market speculation but said that "it is to be expected that Canopius would be the subject of potential acquisition interest, recognizing the strength of our franchise and reputation, our scale, our position as one of a handful of privately owned Lloyd's businesses and the ten-year duration of our private-equity backing."

Sompo Japan is the largest unit of NKSJ, Japan's third biggest property and casualty (P&C) insurer by market value. NKSJ has the smallest overseas operations among the three Japanese P&C majors, which include Tokio Marine and MS&AD Insurance.

Japanese insurance companies are increasingly looking to acquire overseas assets as revenues are hit by the country's ageing population and fierce domestic competition.

According to AVCJ Research, should the acquisition go ahead it will be Sompo Japan's largest overseas acquisition to date. The unit previously acquired a 93% in Turkish non-life insurance company Fiba Sigorta Anonim Sirketi for JPY28.1 billion in 2010.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Financials
• Buyouts
• Japan
• Financial Services
• buyout