Japan's Dai-Ichi Life to take 15% stake in British insurer M&G

(Reuters) -M&G has formed a partnership with Dai-ichi Life Holdings in which the Japanese life insurer plans to buy a 15% stake, sending shares in the British insurer and asset manager up sharply.

The partnership, which makes Dai-ichi M&A's biggest 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, M&G said on Friday.

The two companies will "pursue opportunities to co-invest in new asset management capabilities", and M&G will become Dai-ichi Life's preferred asset management partner in Europe as part of the deal.

Andrea Rossi, group CEO of M&G, said that the partnership would enable it to capitalise on "significant private market opportunities across Europe" and give it greater access to the Japanese and Asian market.

M&G shares rose more than 8% in early trading, hitting their highest since June 2021.

Under the deal, 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% shareholding, the British company said.

M&G reported an unexpected rise in annual profit in March, helped by cost-cutting and growth in its asset management business.

Dai-ichi Life earlier in May said it would raise its stake in UK-based Capula Investment Management to 15%, from just under 5%, and in April announced an agreement to buy a 15.1% stake in Australian investment manager Challenger for around $550 million.

(Reporting by Yadarisa Shabong in Bengaluru and Elizabeth Howcroft in Paris; Editing by Mrigank Dhaniwala and Jane Merriman)