Japanese insurer Dai-ichi Life and UK asset manager M&G have agreed a new long-term partnership across asset management and life insurance.

Dai-ichi Life and M&G have agreed on a long-term partnership, which sent shares in M&G significantly higher in early trading on Friday. Dai-ichi will take a 15 per cent state in M&G, subject to regulatory conditions.

The deal which will make Dai-ichi Life become M&G’s largest single shareholder, is expected to deliver at least $6 billion of new business flows for M&G and $2 billion of new business flows for Dai-ichi Life over the next five years.

Dai-ichi Life intends to acquire the 15 per cent stake in M&G via on-market purchases with no change to M&G’s issued share capital. Subject to certain conditions being met, Dai-ichi Life will have the right to appoint a director to the board of M&G for as long as it holds at least a 15 per cent shareholding in M&G.

M&G will also become Dai-ichi Life’s preferred asset management partner in Europe. The partnership will focus on growth, distribution and product development opportunities, with the goal of delivering substantial new business flows for both parties. M&G will support Dai-ichi Life’s access to public and private markets capabilities in Europe, for Dai ichi Life’s own investment requirements as well as the needs of its customers. The deal is expected to accelerate M&G’s expansion in European private markets, while opening new potential sources of business flows in Japan and across Asia.

Asset management has seen a number of consolidation and collaboration deals in recent years. “We see our partnership with M&G acting as a spearhead to develop our presence across Europe and the UK, accelerating our strategy to become a global top-tier insurance group,” Tetsuya Kikuta, president and CEO of Dai-ichi Life HD said. “M&G possesses not only a reputable and long-established life insurance business, but comprehensive asset management solutions in both public and private markets. With this alliance, we are bringing together our respective capabilities to create a mutually beneficial partnership that will create value over the long-term.” 

“It will enable us to further capitalise on the significant private market opportunities across Europe and enable even greater access to the Japanese and Asian market where we will benefit from Dai-ichi Life Holdings market-leading expertise,” Andrea Rossi, group CEO of M&G, added. 

BofA Securities acted as lead financial advisor and corporate broker to M&G, Goldman Sachs acted as financial advisor and corporate broker, and Freshfields acted as legal counsel. Mitsubishi UFJ Morgan Stanley Securities acted as financial advisor to Dai-ichi Life and Linklaters acted as legal counsel.