Dai-Ichi plans to run Protective at arm's length; the company HQ will stay in Birmingham.
Carol M. Highsmith / Buyenlarge / Getty Images
By Geoffrey Smith
June 4, 2014

Japan’s Dai-Ichi (DCNSF) is to buy Birmingham, Ala.-based insurance company Protective Life (PL) for $5.7 billion, the two companies said in a statement, confirming leaks that had emerged Monday.

The deal, which will make Dai-Ichi the world’s 13th largest insurer by assets, means Protective shareholders will get $70 a share in cash, a big premium to the company’s average share price over the last year, and 19% above its Tuesday closing price of $58.20. It’s the biggest ever takeover of an American insurer by a Japanese one, and analysts say that more such deals are possible, given the eagerness of Japanese insurers to diversify away from their own shrinking home market.

“This transaction will enable Protective to deliver substantial, immediate cash value to our shareholders while maintaining our mission and continuing on our growth trajectory,”chief executive John D. Johns said in a statement.

Dai-Ichi will leave the current management, led by Johns, in place and leave it pretty much to its own devices in growing the business as before. The company’s HQ will remain in Birmingham. Protective has historically concentrated on buying “back books” of policies from other insurers.

The transaction, which has been approved by both companies’ boards of directors, is expected to close by the end of 2014 or early 2015, subject to Protective stockholders’ approval, regulatory approvals in Japan and the U.S., and other customary closing conditions, the companies said.

Dai-Ichi was advised by Goldman Sachs on the deal, while law firms Baker & McKenzie and Willkie, Farr & Gallagher acted as legal advisers. Protective was advised by Morgan Stanley and Debevoise & Plimpton LLP.

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