Nippon Life Insurance Co., Japan's biggest life insurer, plans to raise its stake in Principal Financial Group Inc. as it seeks expansion abroad, a source said Thursday.
Principal Financial, whose stock has slumped 53 percent this year, said in a regulatory filing Wednesday that it may turn to "strategic" investors as it explores "any and all options" to increase capital. The source, who asked not to be identified before an announcement, declined to say how much Nippon Life plans to invest.
"I think they would take capital anywhere they could get it," Steven Schwartz, an analyst at Raymond James & Associates Inc., said of Principal Financial. "The first name that came to my mind was Nippon Life."
Stronger ties with Principal Financial, a global financial services provider, may help Nippon Life expand overseas to counter declining demand in Japan, the world's most rapidly aging nation. The Tokyo-based company is Principal's biggest stock investor, with a 7 percent stake, according to Bloomberg data.