Tokio Marine & Nichido Fire Insurance Co., Ltd. ("Tokio Marine & Nichido", President: Kunio Ishihara) and The Nisshin Fire and Marine Insurance Company, Limited ("Nisshin Fire", President: Michio Noda) agreed on a business alliance and capital tie-up on March 19, 2003 (the "Agreement"). Pursuant to the Agreement, Tokio Marine & Nichido intends to acquire 30.99% of the total issued shares of Nisshin Fire.
The Acquisition
Tokio Marine & Nichido intends to acquire a total of 38,490,000 shares of Nisshin Fire at 385 yen (*) per share. 36,000,000 of these shares are currently owned by Nisshin Fire and 2,490,000 of these shares are currently owned by Tokio Marine & Nichido Corporation, a subsidiary of Tokio Marine & Nichido. Subsequent to the acquisition, Tokio Marine & Nichido will own a total of 58,621,000 shares, including 20,131,000 shares it currently owns. Tokio Marine & Nichido will own 30.99% of the total issued shares of Nisshin Fire, representing 31.34% of the voting rights of all outstanding shares of Nisshin Fire. This acquisition will complete the capital tie-up contemplated in the Agreement.
(*) Note: The average closing price of Nisshin Fire shares at the Tokyo Stock Exchange, from January 5, 2005 through February 4, 2005.
Subsequent Steps
February 8, 2005:
Public notice by Nisshin Fire of the resolution of its board of directors regarding the sale of its own shares
February 23, 2005:
Date of payment for the sale of Nisshin Fire's own shares and date of transfer of shares from Tokio Marine & Nichido Corporation to Tokio Marine & Nichido
The current status of Tokio Marine & Nichido and Nisshin Firefs business alliance
Cooperation in sales and marketing
- Tokio Marine & Nichido Life appointed Nisshin Firefs agents as life insurance agents.
- Nisshin Fire sells Tokio Marine & Nichido's Japanese 401k products.
- Tokio Marine & Nichido introduces insurance agents and trainee candidates to Nisshin Fire.
- Tokio Marine & Nichido provides insurance coverage for Nisshin Fire's customers overseas.
- Tokio Marine & Nichido and Nisshin Fire make joint proposals to Nisshin Fire's automobile dealer agents.
Other areas of cooperation
- Tokio Marine & Nichido Card Service Co., Ltd. formed an alliance with Nisshin Fire corporate card.
- Tokio Marine & Nichido Medical Service Co., Ltd. provides medical examination services to Nisshin Fire employees.
- Tokio Marine & Nichido Human Resources Co., Ltd. trains Nisshin Fire employees.
- International Assistance Co., Ltd. provides assistance for Nisshin Firefs overseas travel insurance.
- The Tokyo Average Adjusting Office, Ltd. provides claims adjustment services for Nisshin Firefs marine insurance.
Purpose of the alliance - Based on their long-standing and cooperative association, Tokio Marine (currently known as Tokio Marine & Nichido) and Nisshin Fire will strengthen their relationship and continue to expand their respective businesses as independent property and casualty insurance companies.
- Tokio Marine will provide Nisshin Fire with business support to enable Nisshin Fire to implement its new property and casualty insurance business model using its retail strategy.
- Tokio Marine and Nisshin Fire intend to share their know-how for mutual success by developing the retail strategies of their respective business models.
Areas of cooperation and organizational structures to further the alliance - Headed by the presidents of both companies, an Alliance Promotion Committee will be created to oversee the continued cooperation of Tokio Marine and Nisshin Fire.
- Additionally, sub-committees, including a Planning sub-committee, a Products and Services sub-committee and a Distribution sub-committee will be established as subordinate bodies of the Alliance Promotion Committee in order to study matters in various business areas. (As of February 2005, 10 sub-committees were established.)
Capital tie-up - Tokio Marine intends to acquire one-third of the outstanding shares of Nisshin Fire by the end of March 2005.
Board of directors
- Nisshin Fire intends to invite some appointees of Tokio Marine to join the board of directors of Nisshin Fire subject to a resolution of its June 2003 annual general meeting of shareholders. (As of February 2005, two directors were invited.)
