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Investing.com -- M&G (LON:MNG) and Dai-ichi Life Holdings (TYO:8750) on Friday announced a long-term partnership under which Dai-ichi plans to acquire about a 15% stake in M&G through on-market purchases, subject to regulatory approvals.
Shares of the London-based company were up 6.9% at 04:02 ET (08:02 GMT).
The partnership targets $8 billion in new business over five years, with $6 billion flowing to M&G and $2 billion to Dai-ichi.
As part of the agreement, M&G will become Dai-ichi’s preferred asset management partner in Europe.
Approximately half of M&G’s new flows, at least $3 billion, will come from Dai-ichi’s balance sheet and be deployed into M&G’s strategies, while the remainder will arise from joint development and distribution initiatives.
Dai-ichi expects to generate an additional $2 billion of new business through investments in its own products and co-developed offerings with M&G.
The partnership also envisions the possibility of distributing M&G’s existing asset management products in Japan and Asia, developing new life insurance products, and collaborating in life insurance across Europe and Japan.
Both firms will explore co-investment opportunities in new asset management capabilities. Under the terms of the agreement, Dai-ichi’s stake acquisition will not alter M&G’s issued share capital, and Dai-ichi will have the right to appoint one director to M&G’s board as long as it holds at least 15%.
The deal includes a two-year lock-up period following the 15% threshold, a cap on ownership at 19.99%, and requirements for orderly conduct in any share sale. Dai-ichi will also receive certain information rights tied to its shareholding.
M&G said “against the backdrop of a volatile market environment, M&G has continued to execute the strategy it laid out at its recent Full Year 2024 Results,” and that “performance year to date has been broadly in line with expectations.”
Jefferies, providing a first view on the deal, described the partnership as a surprise but expressed a positive outlook, stating, “To our mind, there appear to be no downsides to this partnership, and we expect it to be taken well by investors.”
They flagged that this marks the second instance this year of a Japanese life insurer announcing a tie-up with a UK life insurer, following Meiji Yasuda’s purchase of around 5% of Legal & General (LON:LGEN).
This long-term partnership aligns with M&G’s international growth plans, particularly its expansion in European private markets, while providing Dai-ichi with enhanced investment and distribution opportunities across Asia and Europe.