Tower Australia Group is set
to become a wholly-owned subsidiary of the third largest life
insurer, Dai-ichi Life.

This follows acceptance of an
offer by Dai-ichi to acquire the 71.04% of Tower it does not
already own by Tower’s independent directors who have recommended
Tower shareholders to vote in favour of the offer.

The offer by Dai-ichi, which
acquired a 28.96% stake in Tower in 2008, values Australia’s only
specialist life insurer listed on the Australian Securities
Exchange at A$1.675bn ($1.7bn), a 46.5% premium to its share price
immediately prior to the offer.

Tower, Australia’s fourth
largest life insurer based on premium income, reported new business
premium income of A$128.8m in the first half of 2010, a 34.3%
increase compared with the first half of 2009.

Tower has recorded a 15% CAGR
in in-force premium over the past 15 years and provides cover to
some 2.5m people.

In a statement, Dai-ichi said
that since acquiring a stake in Tower it had built a close working
relationship with Tower, appointing two board members and
facilitating cooperative initiatives with Tower.

“Through this relationship, the company formed a high
opinion of the competitive advantages and potential for continued
growth of Tower,” noted Dai-ichi.