REG - M&G PLC - Dai-ichi Life and M&G form strategic partnership

M&GAnnouncement

30/05/2025 07:00

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RNS Number : 7674K  M&G PLC  30 May 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

 

Dai-ichi Life HD and M&G establish

long-term strategic partnership

 

·          M&G and Dai-ichi Life HD establish an ambitious
long-term strategic partnership

·          M&G to become preferred asset management partner for
Dai-ichi Life HD in Europe

·          Partnership is expected to deliver at least $6 billion of
new business flows for M&G and $2 billion of new business flows for
Dai-ichi Life HD over the next five years

·          Dai-ichi Life HD intends to acquire a c.15% shareholding
in M&G plc

 

Dai-ichi Life Holdings, Inc. ("Dai-ichi Life HD") and M&G today announce a
new long-term strategic partnership across asset management and life
insurance.

 

M&G, one of the leading international active asset managers and asset
owners, will become Dai-ichi Life HD's preferred asset management partner in
Europe. This strategic partnership will be focused on growth, distribution and
product development opportunities, with the goal of delivering substantial new
business flows for both M&G and Dai-ichi Life HD.

 

Consistent with M&G's strategy to deliver asset management and
international growth, the strategic partnership with Dai-ichi Life HD will
accelerate M&G's expansion in European private markets, while opening new
potential sources of business flows in Japan and across Asia. M&G expects
the partnership to drive improved long-term new business flows and to support
growth in Adjusted Operating Profit.

 

M&G will support Dai-ichi Life HD's access to public and private markets
capabilities in Europe, for Dai-ichi Life HD's own investment requirements as
well as the needs of its customers. Dai-ichi Life HD highly values the strong
life insurance capabilities of M&G and, as part of the partnership, will
work closely with M&G to enhance its own expertise in bulk purchase
annuities.

 

In recognition of M&G's compelling investment case and growth potential,
Dai-ichi Life HD intends (subject to regulatory approvals) to acquire a
shareholding of c.15% in M&G plc, creating significant alignment to
capture long-term value creation opportunities across an array of strategic
initiatives. Dai-ichi Life HD intends to acquire this stake via on-market
purchases with no change to M&G's issued share capital. Subject to certain
conditions having been met, Dai-ichi Life HD will have the right to appoint a
director to the Board of M&G plc for as long as it holds at least a 15%
shareholding in M&G plc.

 

Under the terms of the arrangement:

·    The partnership is expected to generate at least $6 billion in new
business flows into funds managed by M&G over the next five years, of
which at least $3 billion is intended to be in M&G's market-leading
high-alpha strategies across public and private markets;

·    Of the $6 billion new business flows, half is expected to come from
Dai-ichi Life HD's balance sheet, on an evergreen basis. The other half will
come from joint development opportunities, such as the distribution of M&G
products by Dai-ichi Life HD;

·    Similarly, the partnership is expected to generate at least $2
billion in new business flows for Dai-ichi Life HD over five years, through a
combination of balance sheet investments in, or distribution of, asset
management products offered by Dai-ichi Life HD's subsidiaries, and through
Dai-ichi Life HD's distribution of jointly developed products;

·   Dai-ichi Life HD will also consider distributing M&G products in
Japan and Asia, as well as working together to develop new products;

·    Dai-ichi Life HD and M&G will also consider collaboration in life
insurance in Europe and Japan; and

·    Dai-ichi Life HD and M&G will pursue opportunities to co-invest
in new asset management capabilities, in line with their respective asset
allocation needs and growth priorities.

 

Shareholding and governance

M&G and Dai-ichi Life HD are fully aligned to deliver long-term growth
from the partnership. Dai-ichi Life HD is highly supportive of M&G's
strategic ambitions and intends to acquire a c.15% shareholding in M&G.

 

In connection with the strategic partnership arrangement, M&G and Dai-ichi
Life HD have entered into an Implementation Agreement which governs the form
of Dai-ichi Life HD's ownership and governance rights, including its right to
appoint a director to the M&G Board (on the basis described above).

 

As part of this agreement, Dai-ichi Life HD has agreed to customary
contractual restrictions, including:

·    A lock-up on M&G shares for two years following Dai-ichi Life
HD's shareholding reaching the 15% threshold, subject to customary exceptions;

·    A standstill restriction not to acquire M&G shares above 19.99%
of M&G's issued share capital, subject to customary exceptions; and

·    An orderly market arrangement relating to disposals of M&G
shares.

 

Dai-ichi Life HD will also have certain customary information rights in
connection with its shareholding. Dai-ichi Life HD intends to acquire a c.15%
interest in the shares of M&G, subject to the receipt of regulatory
approvals. Dai-ichi Life HD plans to appoint a financial institution to
facilitate its acquisition of M&G shares and assist with risk management
in relation thereto.

 

As a result of Dai-ichi Life HD's c.15% shareholding, subject to certain
conditions having been met, Dai-ichi Life HD will have the right to appoint a
director to the Board of M&G plc, and it is expected that M&G will be
an affiliate of Dai-ichi Life HD for Japanese accounting purposes((1)).

 

The arrangements can be terminated by the parties in certain circumstances,
including if the parties are no longer strategically aligned (in which event
Dai-ichi Life HD's director nomination and information rights fall away).

 

Tetsuya Kikuta, President and CEO of Dai-ichi Life HD said:

"Dai-ichi Life Holdings is delighted to enter into a strategic alliance with
M&G, a highly regarded global player in the insurance and asset management
industries, to collaborate and develop capabilities together in multiple
areas, especially in Europe."

 

"We see our partnership with M&G acting as a spearhead to develop our
presence across Europe and the UK, accelerating our strategy to become a
global top-tier insurance group."

 

"M&G possesses not only a reputable and long-established life insurance
business, but comprehensive asset management solutions in both public and
private markets."

 

"With this alliance, we are bringing together our respective capabilities to
create a mutually beneficial partnership that will create value over the
long-term."

 

Andrea Rossi, Group CEO of M&G said:

"The strategic partnership with Dai-ichi Life Holdings and the associated
c.15% investment is recognition of M&G's strengths and clear confidence in
our leadership, strategy and long-term prospects."

 

"It brings together two highly complementary international businesses with
shared growth ambitions who aim to deliver excellent client service and
sustainable shareholder returns."

 

"It will enable us to further capitalise on the significant private market
opportunities across Europe and enable even greater access to the Japanese and
Asian market where we will benefit from Dai-ichi Life Holdings market-leading
expertise."

 

M&G trading update

Against the backdrop of a volatile market environment, M&G has continued
to execute the strategy it laid out at its recent Full Year 2024 Results. The
performance year to date has been broadly in line with expectations.

 

 

 

Notes to Editors:

1.   BofA Securities acted as lead financial adviser and corporate broker to
M&G and Goldman Sachs acted as financial adviser and corporate broker.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. acted as financial adviser
to Dai-ichi Life HD. Freshfields LLP acted as legal counsel to M&G and
Linklaters LLP acted as legal counsel to Dai-ichi Life HD.

 

2.   Analyst presentation and conference call details

M&G will host a webcast for analysts and investors at 8:30am (BST) today.
To join the webcast, please use the following details:

 

 
https://sparklive.lseg.com/MG/events/cdd0957a-5892-4bc1-89df-29c95d2b2593/ceo-market-update
(https://sparklive.lseg.com/MG/events/cdd0957a-5892-4bc1-89df-29c95d2b2593/ceo-market-update)

 

((1) Following M&G becoming an equity-method affiliate of Dai-ichi Life
HD, quarterly earnings of M&G will be included in Dai-ichi Life HD's
consolidated results.)

 

M&G contact information

 Investor Relations
 Luca Gagliardi                                                  +44(0) 208 162 7301

 Luca.gagliardi@mandg.com (mailto:Luca.gagliardi@mandg.com)

 Media Relations
 Will Sherlock                                                   +44 (0)7786 836562

 Will.sherlock@mandg.com (mailto:Will.sherlock@mandg.com)

 James Gallagher                                                 +44 (0)7552 374245

 James.gallagher@mandg.com (mailto:James.gallagher@mandg.com)

 For Asian Press:
 Dinah Seah                                                      +65 6436 5305 (office)

 Dinah.seah@mandg.com (mailto:Dinah.seah@mandg.com)              +65 9795 2294 (mobile)

 

About Dai-ichi Life HD

Dai-ichi Life HD was established in 1902 as Japan's first mutual insurance
company. Dai-ichi Life HD demutualized and was listed on the Tokyo Stock
Exchange in 2010 and shifted to a holding company structure in 2016. Dai-ichi
Life HD has been expanding its presence overseas since 2007. Dai-ichi Life HD
will continue to promote growth that is balanced between developed markets and
emerging markets. Dai-ichi Life HD has 67.5 trillion yen in total assets and
contributes to society and moves the economy and financial markets as an
institutional investor pursuing both stability and profitability and by
supporting capital needs in growth areas such as infrastructure. For more
information, please visit https://www.dai-ichi-life-hd.com/en/index.html
(https://www.dai-ichi-life-hd.com/en/index.html)

 

 

About M&G

M&G is a leading international savings and investments business, managing
money for around 4.5 million retail clients and more than 900 institutional
clients in 39 offices worldwide. As at 31 December 2024, we had £345.9
billion of assets under management and administration. With a heritage dating
back more than 170 years, M&G has a long history of innovation in savings
and investments, combining asset management and insurance expertise to offer a
wide range of solutions. We serve our retail and savings clients under the
M&G and Prudential brands in the UK and Europe, and under the M&G
Investments brand for asset management clients globally.

 

Important Notice - Inside Information

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014 (as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 as amended by virtue
of the Market Abuse (Amendment) (EU Exit) Regulations 2019). Upon publication
of this announcement, this inside information will be considered to be in the
public domain. The person responsible for making the notification on behalf of
M&G plc is Charlotte Heiss, General Counsel and Company Secretary.

 

Merrill Lynch International ("BofA Securities"), a subsidiary of Bank of
America Corporation, which is authorised by the Prudential Regulation
Authority (the "PRA") and regulated by the Financial Conduct Authority (the
"FCA") and the PRA in the United Kingdom, is acting exclusively for M&G in
connection with the matters referred to in this announcement and for no one
else and will not be responsible to anyone other than M&G for providing
the protections afforded to its clients or for providing advice in relation to
the matters referred to in this announcement. Neither BofA Securities, nor any
of its affiliates, owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of BofA Securities in
connection with this announcement, any statement contained herein or
otherwise.

 

Forward Looking Statements

This announcement may contain certain "forward-looking statements" with
respect to M&G plc (M&G) and its affiliates (the Group). These
statements are based on the current expectations of the management of M&G
and are naturally subject to uncertainty and changes in circumstances.

Forward-looking statements include statements typically containing words such
as "will", "may", "should", "believe", "intends", "expects", "anticipates",
"targets", "estimates" and words of similar import. Although M&G believes
that the expectations reflected in such forward-looking statements are
reasonable, M&G can give no assurance that such expectations will prove to
be correct. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by such forward looking statements. These factors may include, but are
not limited to: changes in domestic and global political, economic and
business conditions; market-related conditions and risk, including
fluctuations in interest rates and exchange rates, the potential for a
sustained low-interest rate environment, corporate liquidity risk and the
future trading value of the shares of M&G; investment portfolio-related
risks, such as the performance of financial markets generally; legal,
regulatory and policy developments; the impact of competition, economic
uncertainty, inflation and deflation; the effect on M&G's business and
results from, in particular, mortality and morbidity trends, longevity
assumptions, lapse rates and policy renewal rates; the timing, impact and
other uncertainties of future acquisitions or combinations within relevant
industries; the impact of internal projects and other strategic actions, such
as transformation programmes, failing to meet their objectives; and the impact
of legal and regulatory actions, investigations and disputes.

Other unknown or unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements.

Given these risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results. Neither
M&G nor any of its affiliated companies undertakes any obligation to
update or revise forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent legally
required.

 

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