Sompo Japan Nipponkoa Plans to Buy 15% Stake in French Reinsurer SCOR

Sompo Japan Nipponkoa Holdings Inc. will buy a 15 percent stake in French reinsurer SCOR SE in potentially its biggest investment abroad amid diminishing opportunities for growth at home.

The insurer will initially buy 7.8 percent from Swiss fund Patinex AG and eventually increase ownership to at least 15 percent, including by purchasing the stock from the market, Tokyo-based Sompo Japan said in a statement Friday.

While the statement didn’t give a price, a 15 percent stake would be valued at about 860 million euros ($947 million), according to data compiled by Bloomberg based on Thursday’s close. That would top Sompo Japan’s 594 million-pound ($904 million) purchase of U.K. insurer Canopius Group Ltd. last year.

Japan’s fourth-biggest publicly traded insurer is expanding in Europe and the Americas to obtain stable profit contributions, it said in the statement. The stake in SCOR may boost Sompo Japan’s annual net income by about 10 billion yen, a person with knowledge of the matter said earlier, asking not to be identified before the announcement.

Shares of Sompo Japan climbed 1.9 percent to close at 3,771 yen. The stock has jumped 24 percent this year, more than the Topix index’s 9.5 percent advance. SCOR climbed as much as 3.6 percent in Paris trading, the biggest increase in 13 months. The shares were up 3.3 percent at 30.79 euros at 9:17 a.m.