Sompo Japan Insurance Inc, a unit of Japan’s third-largest casualty insurer group by market value, is considering buying the UK’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 yesterday, without giving further details. Sompo will use ￥100 billion (US$969 million) of its own capital to buy 100 percent of the UK company and plans to complete the deal next year, the Nikkei Shimbun 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 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 Web site showed.
NKSJ last month more than doubled its profit forecast to ￥72 billion 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 showed.
Overseas subsidiaries accounted for ￥6.5 billion of the group’s ￥29.1 billion net income in the six months to Sept. 30, compared with ￥19.9 billion from Sompo Japan and Nipponkoa, NKSJ said in a statement on Nov. 19.
Canopius employs about 560 people with operations in the UK, Ireland, Switzerland, the US, Singapore and Australia offering property, casualty, marine, energy and specialty insurance, according to a fact sheet on its Web site. Gross written premiums totaled ￡692 million (US$1.1 billion) last year, the data showed.
Overseas acquisitions by Japanese companies this year are valued at US$46.3 billion across 657 deals, with Mitsubishi UFJ Financial Group Inc’s US$5.6 billion purchase of Thailand’s Bank of Ayudhya Pcl topping the rankings, Bloomberg-compiled data showed. That compares with US$112.3 billion in the same period last year, led by SoftBank Corp’s US$21.6 billion purchase of Sprint Corp.