Nippon Life acquires 26% stake acquisition of Reliance Life
- Created on Tuesday, 01 November 2011 23:50
Reliance Life Insurance has announced the induction of Mr. Takeshi Furuichi as a Non executive Director and
Nippon nominee on the Board of the company. Reliance Life Insurance, started operations in 2005, after the acquisition of
life insurance company AMP Sanmar in 2001.
Nippon Life, Japan's biggest life insurance company, on March, 2011 acquired a 26% stake in Reliance Life for a sum of Rs 3,062 crore, surprising analysts with a valuation that was higher than expected. The deal, that values Reliance Life at Rs 11,500 crore, or around $2.6 billion, is the largest foreign direct investment in the financial services industry. Shares of Reliance Capital, the financial services arm of the Anil Dhirubhai Ambani Group, or ADAG, and the owner of Reliance Life, went up by 10% to Rs 562 on the Bombay Stock Exchange as it will receive most of the money.
Last month, Reliance Capital announced completion of its 26% stake sale in Reliance Life to Japan’s Nippon Life Insurance. The company has received the entire transaction proceeds of Rs 3,062 crore (USD 680 million) from Nippon Life. Mr Furuichi’s induction on Reliance Life Insurance Board is part of the stake sale agreement between the two companies. The total valuation of Reliance Life Insurance post this transaction is pegged at approximately Rs 11,500 crore (US$ 2.6 billion).
Mr. Takeshi Furuichi, 57 years, is the Representative Director, Senior Managing Executive Officer and Chief Investment Officer of Nippon Life Insurance. He joined Nippon Life Insurance in 1977 and has held various senior positions during his 34 year tenure within the company, apart from being a Director in many Japanese firms.
Mr. Sam Ghosh, CEO, Reliance Capital said, “We are delighted to welcome Mr Furuichi on the board of Reliance Life Insurance. His vast experience and contribution as a Board member will certainly help Reliance Life Insurance accelerate its growth and strengthen its position as a leading and world class insurance company in India.”
Commeting on the induction, Mr Furuchi said, “It is my utmost pleasure and tremendous honor to have the privilege to join the Board of Reliance Life Insurance, one of India’s leading and most trusted life insurance companies in India. I look forward to fulfilling my role as a director and making every effort to contribute to further growth of the company.”
About Nippon Life Insurance, Nippon Life is a 122-year-old Global Fortune 100 company, the 7th largest life insurer in the world, and the No.1 private life insurer in Asia and Japan. In July 2009, the company celebrated its 120th anniversary.
For the fiscal year ended March 31, 2011, Nippon Life Insurance posted revenues of Rs 3,49,834 crore (US$ 80 billion) and a profit of Rs 12,199 crore (US$ 3 billion). The company sold around 1.2 million policies taking the total number of policies in force to over 14.5 million as of March 2011.