Dai-ichi Life Insurance is looking to take complete control of Tower Australia with a $4 a share offer.

The offer represents a 46.5% premium over Tower’s closing share price on December 24 and values the deal at $1.76 billion.

Currently the Japanese life insurer owns 29% of Tower, a stake it bought from Guinness Peat in August 2008.

Since then Tower has become a Dai-ichi affiliate and has worked on a number of joint business operations, including building a market for group life insurance for Japanese companies.

Tower MD Jim Minto says the move is “a natural fit” for the two companies.

“Dai-ichi is a major life company and there is a strong natural fit that will allow continued benefits to flow for Tower’s customers, staff and business partners,” he said. 

“Tower will have the benefit of the backing of one of the top 10 life insurers in the world based on revenue.” 

Dai-ichi GM International Business Management Takayuki Kotani said the insurer is looking to increase its geographic spread in the Asia-Pacific region.

“We believe we can assist Tower in the next stage of its development and to meet the challenges ahead in the competitive Australian insurance market.”

The takeover has been welcomed by Tower’s board, who will recommend shareholders’ approval of the deal at a special meeting to be held before the end of this financial year.

At least 75% of Tower shareholders must approve the deal for it to go ahead. Approval from various Australian and Japanese regulatory bodies must also be sought.

Dai-ichi has said it will leave the current management of Tower and the independent directors in place after the takeover. 

The Japanese life insurer has annual premium income of ¥3704 billion ($45.2 billion), and reported a profit of ¥330 billion ($4 billion) for the year to March 31, 2010.