Japan-based Nippon Life Insurance has signed an agreement to acquire an 85% stake in MassMutual Japan, a unit of US-based MassMutual Financial Group, in a JPY104.2bn ($980m) deal.

Through the latest deal, the Nippon Life plans to strengthen its bancassurance sales while diversifying sales channel in a shrinking domestic market.

In a statement, Nippon Life stated that transaction will “increase profit under ultra low – interest rate environment” and “steadily expand profit of group business” as per its growth strategies for mid-term management plan, which began in last April.

Nippon Life plans to fund the deal with cash on hand. Once the transaction is closed, MassMutual Japan will operate as a subsidiary of Nippon Life.

Under the terms of the deal, MassMutual Life Insurance Company CEO Mitsuru Imoto will continue to serve as president and CEO of MassMutual Japan after the transaction.

Pending receipt of the concerned regulatory approvals, the transaction is scheduled to be completed in May or June this year.

Post disposal of stake, MassMutual International will continue to own nearly 14.9% of the issued and outstanding shares of MassMutual Japan. The company will also support MassMutual Japan for the smooth business transition and further development.

Nippon Life’s latest deal follows its $2.5bn acquisition of domestic rival Mitsui Life Insurance in 2016.