SUMITOMO Life Insurance, one of Japan’s major life insurers, has entered into an agreement with Aviva Group to acquire its 25.9 per cent stake in Singapore Life (Singlife) for S$900 million.

The transaction is expected to complete in the third quarter of the financial year, and is subject to closing conditions including regulatory approval, said Sumitomo Life on Wednesday (Sep 13).

Sumitomo Life currently holds a 23.2 per cent stake in the home-grown insurer, which will increase after the transaction.

The exact ownership percentage post-transaction will, however, vary depending on other Singlife shareholders.

The Singlife shareholders may or may not exercise their rights of first offer and tag along under the existing shareholders’ deed, which may also change the final consideration.

“Sumitomo Life has seen Singapore as a key market within its overall South-east Asia strategy and supported Singlife to expand its footprint as a long-term strategic investor since Sumitomo Life’s initial investment in 2019,” the Japanese life insurer added.

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Additionally, Sumitomo Life will acquire the two debt instruments held by Aviva, including reset subordinated perpetual capital securities issued by Singlife, for a combined consideration of S$500 million.

Sumitomo Life expects the transaction to improve the earnings of its international portfolio, as well as its business sustainability.

The announcement stated that Singlife’s total assets stood at S$14.4 billion and its gross premiums were S$3.5 billion as at end-2022. (*See amendment note)

*Amendment note: An earlier version of the story incorrectly stated Singlife’s total assets and gross premiums.