Tokio Marine: To Buy Delphi Financial Group For $2.66 Billion

Tokio Marine Holdings Inc. (8766.TO) said Wednesday that it has agreed to buy Delphi Financial Group (DFG) for $2.66 billion, or Y205 billion, in the latest sign of how the yen's strength is providing Japanese firms with ammunition to hook up with companies outside Japan to offset the dim outlook at home.

Japan's largest nonlife insurer by market value said the transaction of Delphi shares is expected to be completed in the April-June quarter of 2012. It will include Delphi earnings in its group results from the fiscal year beginning April 2012.

The move is the latest illustration of how the nation's insurance sector has been actively looking for a bigger slice of market share and growth opportunities outside of its home market through M&A activities, in the face of the headwinds in Japan, with its shrinking population and sluggish economy. The yen's strength is also giving Japanese companies a catalyst to press ahead with the buying spree.

Tokio Marine has already made significant overseas acquisitions, buying U.K. insurer Kiln for about Y95 billion and U.S. Philadelphia Consolidated Holding Co. for $4.7 billion in 2008.

In August, the company said it would acquire the remaining shares it doesn't already own on First Insurance Company of Hawaii Ltd. for about $165 million (Y12.9 billion).

-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789; [e-mail]