Japan Post Insurer Will Buy Back $3.3 Billion of Its Shares

Japan Post Holdings Co.’s insurance unit plans to buy back up to 29% of its shares for about 358.9 billion yen ($3.3 billion) as its parent company reduces its stake, giving the insurer more freedom to expand its business.

Japan Post’s stake in the insurance unit will fall to 49.9%, according to a statement Friday. The acquisition of the stock will improve capital efficiency, boost shareholder returns and advance the privatization of the postal service, the statement said.

Investors had been anticipating a buyback as Japan Post Insurance Co. builds its business following a sales scandal in 2019 that resulted in the resignation of senior management. The company, which is currently governed by a strict privatization law that limits new product sales and any merger activity, will see restrictions ease if the holding company’s stake falls to 50% or less.

Japan Post Insurance will buy the shares at Friday’s closing price of 2,203 yen per share. The stock closed 1.7% higher on Friday before the announcement, taking its advance over the past 12 months to 72%.

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