Founded in December 1968, Nichii owns Nichigakkan and Nichii Carepalace.
Nichigakkan is said to be a leading nursing care provider in Japan, offering medical, nursing and childcare services.
Nichii Carepalace runs nursing homes and other facilities.
The Japanese life insurer aims to diversify its revenue sources through the acquisition, which is expected to strengthen its life care business and expand its customer base.
Sources told the publication that Osaka-based Nippon Life has already signed an agreement to acquire nearly all the outstanding shares of Nichii for around Y210bn.
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Funds affiliated with the US investment company Bain Capital and others indirectly own Nichii’s shares.
Nippon Life aims to finalise the transaction as quickly as possible, subject to approval from the Japanese financial services regulator.
The forecasted operating profit for Nichii’s fiscal year ending in March 2024 is Y11.7bn, approximately four-times higher than the previous year.
The company is expected to generate the highest revenue in the industry from its nursing care division, which is expected to be between Y160bn and Y170bn.
In May 2023, Nippon Life selected open-source machine learning platform H2O.ai to transform its operations.
Under the alliance, Nippon Life agreed to deploy H2O Driverless AI tools to better meet the requirements of its policyholders.
At the start of this year, Nippon Life said it will invest $1bn in Resolution Life.
Resolution Life is an insurance consolidator with operations in Bermuda, Australia, New Zealand, the UK and the US.