OREANDA-NEWS. Fitch Ratings says that Nippon Life Insurance Company's (Nippon Life, Insurer Financial Strength (IFS): A/Stable) ratings will not be affected by the planned acquisition of Mitsui Life Insurance Company Limited (Mitsui Life, IFS: BBB+/Stable).

Nippon Life has not said how much the acquisition will cost, but the media have put it at about JPY300bn. Based on that amount, Fitch is of the view that the deal will not materially affect the financial profile of Nippon Life given the size of the acquisition relative to the company's capital adequacy.

The transaction will further enhance Nippon Life's presence in the Japanese private life insurance market, especially the bancassurance business. Nippon Life's market share by in-force policy amount will increase to 20.8% if Mitsui Life is included, from 18.3% as of end-March 2015.

Mitsui Life will operate as a subsidiary of Nippon Life, while maintaining its brand name and existing distribution channel, which has strong ties with Mitsui Group. Nippon Life is in discussions with certain Mitsui Group members such as Sumitomo Mitsui Banking Corporation (IDR: A-/Stable) regarding their reacquisition of approximately 15% in aggregate of Mitsui Life's shares after the transaction.

Nippon Life reported core profit of JPY679bn, with total assets of JPY62.2trn, while Mitsui Life reported core profit of JPY59bn, with total assets of JPY7.4trn in the financial year ending March 2015.