Aflac issued the following announcement on Dec. 19.
Aflac Incorporated (NYSE: AFL) announced today that it has further strengthened its longstanding distribution and business relationship with Japan Post Holdings Co., Ltd. (Japan Post Holdings). In conjunction with today's announced agreement, Japan Post Holdings plans to purchase approximately 7% of Aflac Incorporated's outstanding common shares through a trust. This investment is being accomplished on a non-dilutive basis to Aflac Incorporated's shareholders, as all shares will be purchased through open market or private block purchases in the United States. In addition, this agreement does not change Aflac Incorporated's outlook to repurchase an expected range of $1.3 to $1.7 billion of its common shares in 2019.
In conjunction with this announcement, Aflac Incorporated will host a conference call at 8:00 a.m. (ET) today (December 19, 2018). Please see the end of this release for more information about the call.
Through this announced strategic alliance, the parties have renewed their mutual commitment to the cancer insurance marketplace in Japan. Japan Post Co., Ltd. (Japan Post), a wholly owned subsidiary of Japan Post Holdings, will continue to offer Aflac's cancer products through more than 20,000 postal outlets across Japan, as well as through Japan Post Insurance Co., Ltd. (Japan Post Insurance) and its 76 directly managed sales offices. The parties will also continue to collaborate to promote cancer awareness and education, cancer screening, and philanthropic sponsorship of cancer-related causes in Japan.
In addition to distributing cancer insurance policies through Japan Post and Japan Post Insurance, the companies will explore opportunities for further collaboration in product development, in leveraging digital technology to improve customer experience, in domestic and overseas business expansion and in utilizing the asset management expertise of Aflac Global Investments in certain capacities.
Japan Post Holdings, as part of its investment, has agreed to enter into a shareholder agreement with Aflac Incorporated. The agreement will provide for Aflac shares to be acquired by a trust under which Japan Post Holdings will be the economic beneficiary. It will also include a cap on share ownership of 10%, a minimum holding period or "lock-up" provision and a standstill provision and voting restrictions in light of the fact that the shares, like all Aflac Incorporated common shares, will be eligible for 10-for-1 voting rights after being held for 48 consecutive months. These voting restrictions effectively limit the trustee's voting rights to no more than 20% of the voting rights and further restrict the trustee's voting rights with respect to certain change in control transactions. Japan Post Holdings will not have a Board seat on Aflac Incorporated's Board of Directors and will not have rights to control, manage or intervene in the management of Aflac Incorporated.
This strategic investment is subject to certain regulatory approvals in Japan and the U.S. Regulatory approvals are anticipated in the second half of 2019.
Commenting on the announcement, Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos said: "Since initially forming our partnership with Japan Post Holdings in 2008, we have enjoyed continuing to develop our alliance with Japan Post Holdings and its subsidiaries. Together we have paid claims and benefits in excess of ¥13 billion on cancer policies sold by Japan Post Holdings' subsidiaries since the inception of our alliance. We look forward to continuing this relationship in a way that benefits both companies and their stakeholders. We believe Japan Post Holdings' strategic investment reflects the overall strength of the Aflac brand, our reputation for quality customer service, and the comprehensive support we provide to our customers, agents and alliance partners."
Also commenting on the announcement, Japan Post Holdings Director and Representative Executive Officer, President and CEO Masatsugu Nagato said: "Aflac Japan and Japan Post Holdings have established a strong relationship of trust as business partners over the years through the various initiatives regarding cancer insurance. This strategic alliance aims to create sustained growth for both companies, and our investment in Aflac Incorporated reinforces our mutual economic interests."
Japan Post group consists of Japan Post Holdings and its three operating subsidiaries: Japan Post Co., Ltd.; Japan Post Insurance Co., Ltd.; and Japan Post Bank Co., Ltd. These subsidiaries provide universal postal services as well as a variety of financial products in post offices throughout Japan.
On the conference call, Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos; Executive Vice President and Chief Financial Officer of Aflac Incorporated Frederick J. Crawford; and President and Representative Director of Aflac Life Insurance Japan Ltd. Masatoshi Koide will deliver prepared remarks before opening the call for questions. The following executives will also be available to answer questions on the call: President of Aflac International and Chairman and Representative Director of Aflac Life Insurance Japan Ltd. Charles D. Lake II; Executive Vice President and Director of Sales and Marketing of Aflac Life Insurance Japan Ltd. Koji Ariyoshi; Executive Vice President and Principal Financial Officer of Aflac Life Insurance Japan Ltd. J. Todd Daniels; and Senior Vice President, Treasurer and Head of Corporate Development of Aflac Incorporated Max K. Brodén. To listen to today's conference call, please go to aflac.com/investors and register for the webcast. When joining either the call or webcast, please allow sufficient time to register in advance.
Original source can be found here.
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