Japan Post Holdings hopes to approve the plan by the end of the month and complete the share purchase by the end of next year.
The two companies have agreed not to dispatch executives to each other or play a role in each other’s management.
The U.S. prohibits foreign governments from influencing life insurers. Japan Post Holdings remains majority state-owned, hence the use of a trust bank.
Aflac (AFL) shareholding rules mean that the voting rights of the holder increase to a maximum of 20% after its stake is held for a specified period.
Japan Post Holdings aims to take advantage of this rule to become the de facto largest shareholder when roughly four years on from the purchase and make the insurer a member of its group.
After making the investment, the holding company plans to expand Aflac’s cancer insurance products sold at post office counters, jointly develop new products and collaborate in asset management with the insurer. Another idea being considered is to make joint investments in Japan and overseas in areas where the two companies can create synergies.