TAL, the Australian subsidiary of Dai-ichi Life Holdings, has agreed to acquire a 15.1% stake in retirement solutions provider Challenger Limited for ¥80 billion ($547.3 million) from MS&AD Insurance Group Holdings.
The transaction values Challenger at approximately A$8.46 per share, representing a 53% premium to its last closing price of A$5.54 on April 4. The deal requires approval from Australian regulators, including the Foreign Investment Review Board and the Australian Prudential Regulation Authority.
The move positions TAL to capitalize on Australia’s A$4.2 trillion ($2.54 trillion) retirement savings sector at a time when about five million Australians are either in retirement or preparing for it.
“Our minority investment in Challenger is an extension of our commitment to supporting Australians’ financial needs during their retirement,” said TAL CEO Fiona Macgregor.
Despite the ownership change, Challenger’s existing reinsurance partnership with MS&AD subsidiary Mitsui Sumitomo Primary Life Insurance, renewed last year for an additional five years, will continue unaffected.
Following the acquisition, MS&AD representative Masahiko Kobayashi will step down from Challenger’s board of directors.
The deal marks the latest in a series of Australian acquisitions by Japanese insurers seeking growth opportunities outside their shrinking domestic market. It follows a pattern of changing shareholdings in Challenger, with Apollo Global Management having reduced its stake from 20.1% to 9.9% in September 2024.
