Ashurst advises Nippon Life in closing $2.4b acquisition of MLC

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Ashurst advised Nippon Life Insurance Company (Nippon Life) in the close of its acquisition of 80% of the outstanding shares in MLC Limited (MLC), a subsidiary of National Australia Bank (NAB), in a deal with a combined value of $2.4b.
 
NAB’s sale of MLC completes the bank’s major divestments as it realigns and focuses on core businesses in Australia and New Zealand.
 
Natsuko Ogawa, an Ashurst Corporate partner and lead partner to the deal said that the deal is a significant transaction for both the life insurance industry and Japanese investment in the Australian financial services sector. 
 
“The teams at Nippon Life, NAB and MLC have undertaken an enormous amount of work over the past year to achieve this milestone and have done so in a spirit which bodes well for their long term partnership,” she added.
 
The team led by Ogawa also included counsel Arabella Dove, consultant Stephen Menzies, lawyer Akiko Morioka, and foreign associate Tomoaki Sato (Corporate); partners Lisa Simmons and Con Tzerefos, and lawyer Jared Lynch (Financial services agreements, governance and approvals); partner Rehana Box, senior associate Philip Hopley and lawyer Marie Vlassis (Insurance); partners Jane Harvey and Richard Bunting, senior associate Maansi Gupta-Khotkar, lawyer Daniel Fawcett and consultant Jeff Fai (Employment); partner Ken Nguyen, senior associate Kenneth Tang, and lawyer Ashlee Luck (Banking services agreements); and partners Vivian Chang and Barbara Phair, senior associate Sanjay Wavde and lawyer Sophia Kwok (Tax); partner Tim Brookes and senior associates Emma Butler and Will Holmes (Transitional services, IT and privacy law); partner John Sartori and Lawyer Aaron Yorke (Securities trading and FIRB issues); partner Alice Muhlebach (Competition); partner Peter Chalk and senior associate Stuart D'Aloisio (Intellectual Property).
 
NAB retains 20% of MLC’s outstanding shares, worth about $600m, and will retain the MLC brand, which will be licensed for 10 years of use and will continue to be used in providing NAB's super, investments and advice businesses. 
 
The transaction includes a 20 year distribution agreement between NAB and Nippon Life. This includes an agreement for Nippon Life to provide life insurance products to NAB's owned and aligned distribution networks.
 
Jointly, NAB and Nippon Life have announced former senior diplomat and trade negotiator Peter Grey as the new independent Chairman of the new MLC Life Insurance Business.
 
Grey will be joined on the board by newly appointed independent non-executive director Andy Cornish, and non-executive directors Hiroyuki Nishi and Toshihiro Nakashima. Current non-executive director and chair of the MLC Audit Committee Sandra Birkensleigh will continue on the board.
 
The transaction is Nippon Life's first overseas majority acquisition and reflects that Australia is an attractive market for life insurers due to its steadily growing population and the expansion of insurance premiums steady growth through the superannuation system, said Ashurst.
 
Another Japanese insurer recently made headlines after Sompo Holdings was said to be primed to announce it is acquiring US casualty insurer Endurance Specialty for about US$6.5b.

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