The transaction is valued at $680 million

Nippon Life Insurance Company on Monday signed a ‘definitive agreement' to acquire a 26 per cent stake in Reliance Life Insurance, one of India's largest private life insurers. This transaction is subject to necessary regulatory approvals.

Nippon Life Insurance will invest an aggregate value of Rs.3,062 crore ($680 million) to acquire 26 per cent strategic stake in Reliance Life Insurance, stated a press release issued by Reliance Capital here.

“This transaction pegs the total valuation of Reliance Life Insurance at about Rs.11,500 crore ($2.6 billion),” it stated.

Nippon Life is a 121-year-old Global Fortune 100 company, 6th largest life insurer in the world, and the No.1 private life insurer in Asia and Japan.

Commenting on the development, Reliance Capital Chairman Anil D. Ambani stated, “At this time, our thoughts are with the people of Japan, bravely facing an unprecedented natural catastrophe. We pray for strength to the country, its people and our new partners in the entire Nippon Life family, to overcome the trauma of the tragic loss of life and devastation caused by this calamity.”

Reliance Capital CEO Sam Ghosh said: “As a strategic partner, Nippon Life will bring vast experience, expertise and global best practices — in areas of product development, underwriting, investment management, distribution, customer relationship management and risk management.

“This partnership will accelerate Reliance Life Insurance's vision of becoming a world-class insurance company in India.''

“We are delighted to partner with Reliance Life Insurance — an extremely competitive company with unique service offerings, strong operations, nationwide distribution network, highly talented executives and strong brand recognition throughout India. We both share the same passion and philosophy and, together, we believe we can develop a strategic partnership to help Reliance Life Insurance become a world class insurance company in India,” said Nippon Life Insurance President Kunie Okamoto.

Nippon Life Insurance, also called Nissay, is Japan's largest private life insurer. It posted revenues of Rs.324,000 crore ($72 billion) and a profit of Rs.11,700 crore ($2.6 billion) for the fiscal year ended March 31, 2010. The company sold around 1.4 million policies taking the total number of policies in force to over 14.7 million during the same period. In addition to selling life insurance products, Nippon Life Insurance offers various products, including defined contribution pension plans and medical coverage plans. The company celebrated its 120th anniversary in July 2009.

Reliance Life Insurance, a part of Reliance Capital, started operations in 2005, after the acquisition of a life insurance company. The company has sold over seven million policies through its network of nearly 1,250 offices and over 2.15 lakh advisors. Reliance Life manages assets of over Rs.17,000 crore ($3.7 billion) as of December 31, 2010.

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