Japan's Meiji Yasuda Life Insurance said Friday it has agreed to buy StanCorp Financial Group for $5.0 billion as it aims to expand its overseas business as in the face of limited growth at home.
Meiji Yasuda said in its statement that the purchase of the US group, one of the biggest transactions ever by a Japanese life insurance company, is part of its bid to expand profits.
"The size and profit of our overseas insurance business will jump with this purchase," the company said.
"We will position StanCorp as an important base in the US market that is the largest in the world and is expected to see mid- and long-term stable growth".
StanCorp will become a wholly-owned subsidiary of the Japanese insurer early next year, after approval by shareholders of the US group and by the US regulators.
"This is a friendly transaction that the board of directors of StanCorp unanimously approved," it said.
StanCorp's history dates back to 1906 and it now has more than six million customers in the United States where it is a medium-sized insurer.
The purchase comes after Japanese insurance company Tokio Marine Holdings said last month it had agreed to buy US-based HCC Insurance Group for $7.5 billion.
In February another major life insurance firm, Dai-ichi Life, completed the purchase of American Protective Life for $5.55 billion.
Japanese insurance firms have announced nearly US$28 billion worth of acquisitions in the past five years as they pursue business outside their home market, where a shrinking population has weighed on growth.
A strong yen in recent years also encouraged the shopping spree as overseas deals were relatively cheaper for Japanese companies, although the pace has slowed as the currency has sharply weakened.
In May Australia's Toll Holdings said its shareholders voted in favour of a US$5.18 billion takeover bid by Japan Post, before the global postal and logistics giant's expected IPO later this year.
Other major deals in recent years include beverage giant Suntory's nearly $16 billion purchase of the firm behind Jim Beam bourbon, creating one of the world's biggest high-end spirits makers and giving it a foothold in the major US liquor market.