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Shares in Japan insurers surge on merger reports

Shares in Japan insurers surge on merger reports

Shares in Japan's Mitsui Sumitomo Insurance Group and its two rivals shot up yesterday on reports they would merge in a deal seen as shielding the companies from the global financial crisis.
Mitsui Sumitomo is negotiating with Aioi Insurance and Nissay Dowa General Insurance, a source said, in what would create Japan's largest non-life insurer.
Stocks in Mitsui Sumitomo, the second largest non-life insurance company, rose 220 yen or 8.26 percent to close at 2,845 yen on the Tokyo Stock Exchange, outpacing the benchmark Nikkei stock index's marginal gains.
Aioi Insurance jumped 78 yen or 19.21 percent to 484 yen, with Nissay Dowa General up 75 yen or 14.91 percent at 578 yen. Ahead of the opening, stock authorities temporarily suspended off-hours trading in the three companies due to the merger reports.
The three companies denied any deal had been reached. Media reports said they hoped to come to a basic accord in January so they can integrate their operations under a single holding company.
"Despite some reports on the three companies' operational integration, it is not true that there are decisions we can disclose at this stage," said Yuichi Murakami, a spokesman for Mitsui Sumitomo.
But a source close to the matter told AFP: "Non-life insurance companies are negotiating behind the scenes on possible cooperation to survive the tough business environment, including the financial crisis."
If a merger goes ahead, the new group would have a total of 2.7 trillion yen (US$30 billion) in insurance revenue, topping that of the current market leader, Tokio Marine Holdings.
"The market welcomed the news as a positive step, which may help them overcome the crisis quickly," said Masatoshi Sato, a senior analyst at Mizuho Investors Securities.


Updated : 2021-05-08 01:54 GMT+08:00