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[TOKYO] Japan's Nippon Life Insurance Co is in preliminary discussions to buy National Australia Bank Ltd's insurance business for as much as US$2.4 billion, the Nikkei business daily reported on Thursday.
But a source with knowledge of the matter told Reuters that Nippon Life's interest had not advanced that far, saying that it was just having a look at the assets. "Nippon Life does not think it's negotiating with NAB," said the source who was not authorised to talk to media about the matter.
NAB has underperformed rivals in recent years, held back by its troubled UK business and new CEO Andrew Thorburn has been keen to speed up asset sales so the bank can focus on its core domestic and New Zealand franchises.
New global capital rules have also put further pressure on banks, forcing them to consider the disposal of non-core assets and scale back capital intensive businesses.
According to the Nikkei, NAB's life insurance business is likely to fetch between 200 billion yen and 300 billion yen (US$1.6 billion-US$2.4 billion) and that if a deal was completed, it would be Nippon Life's biggest overseas acquisition.
NAB said in a statement that it would not comment on market speculation.
Sources with knowledge of the matter have previously said its life insurance assets were up for sale and that JPMorgan is acting as its financial advisor. JPMorgan declined to comment.
Nippon Life said it is looking at various acquisition opportunities overseas but nothing had been decided.
NAB acquired the life insurance business as part of its wealth management division MLC, which it bought from Lend Lease in 2000 for around US$4 billion. The life insurance operations account for around 20 per cent of MLC.
In May, NAB announced a tie up with a major global reinsurer, without identifying it, to help release A$500 million of core tier-I capital to the group.