Japan's MS&AD to buy Sinar Mas Multiartha $860 mln-source

Japan's largest property and casualty insurer Mitsui Sumitomo Insurance Co will pay about 70 billion yen ($860 million) to acquire a 50 pct stake in the life insurance unit of Indonesian conglomerate Sinar Mas, a source with direct knowledge of the deal said on Friday.

Japanese insurers have been stepping up overseas expansion, with a focus on emerging economies in Asia, as they see weak growth prospects at home given the country's ageing population.

The deal is scheduled to be announced on Monday, said the source, who did not want to be identified because he was not authorised to talk publicly about the matter.

Mitsui Sumitomo Insurance, the core unit of MS&AD, would acquire the stake in Sinar Mas Multiartha through a private placement of shares, said the source.

Sinar Mas Multiartha shares jumped 23 percent on Friday. Japan's markets were closed on Friday for a national holiday.

The deal was first reported by the Nikkei business daily on Friday.

MS&AD was created in April last year through the merger of three insurance companies, becoming Japan's top property-casualty firm in terms of net premiums written.

The company has been most aggressive in expanding in Asia. It bought Aviva's property-casualty insurance operations in Asia for 65 billion yen in 2004, which propelled the Japanese company into the league of major non-local players in many of the region's markets.

Last year, it acquired a 30 percent stake in the life insurance business of Malaysia's Hong Leong Financial Group for 940 million ringgit ($304 million) and merged their non-life operations in the country. ($1 = 81.510 Japanese Yen). Source: Reuters