MassMutual Sells Japanese Business to Nippon Life, Finalizes Retreat from Asia
Massachusetts Mutual Life Insurance Company’s (MassMutual) international insurance holding company MassMutual International in March 2018 sold 85% of its wholly owned subsidiary MassMutual Japan to Nippon Life.
MassMutual Japan, formerly known as Heiwa Life, was acquired by MassMutual in 2001. MassMutual will receive approximately USD 935 million in cash (JPY 104 billion) and retain approximately 15 percent ownership in MassMutual Japan.
The transaction is expected to close in the first half of 2018 and the company will remain headquartered in Tokyo.
According to MassMutual Chairman, President and CEO Roger Crandall, the purpose of the transaction is to realize “… the significant value that has been delivered through the long-term success of MassMutual Japan, […] acquired nearly 17 years ago …”. As to MassMutual’s future international growth plans, they will be achieved through strategic partnerships and joint ventures rather than wholly-owned subsidiaries, according to Eddie Ahmed, Chairman, President and CEO of MassMutual International.
In fact, MassMutual in August 2017 had sold its wholly owned business in Hong Kong, MassMutual Asia, to Yunfeng Financial Group and other investors in exchange for cash and a 25% stake in Yunfeng Financial Group; the transaction is expected to close by the end of 2018.
It also has a joint venture with State Grid Corporation in the People’s Republic of China, as a minority shareholder in Yingda Taihe Life.
In a reversal of its previous expansion strategy, of which Asia was the centerpiece, MassMutual now is left with minority stakes without significant operational involvement in key Asian markets where it has decided to become a mere passive investor.