Japan's Dai-ichi Life Insurance is reportedly in talks to acquire America's Protective Life in a bid to expand to the US, the largest life insurance market by premium revenue.
Dai-ichi on 2 June confirmed to the Tokyo Stock Exchange that it is in talks with a US insurer but refused to name the firm.
A deal could be worth over $5bn (£2.9bn, €3.7bn), according to media reports.
Protective Life's stock was trading 12.56% higher to $58.87 at 09:46 EDT in New York, valuing the firm at some $4.64bn.
Dai-ichi's stock finished 4.97% lower at 1,433 yen in Tokyo Trade, valuing the firm at some 1.42tn yen.
Dai-ichi Life is Japan's second-largest private-sector life insurer and the decision to acquire a US based peer comes against a backdrop of a saturated home market -- Japan is the second-largest life insurance market by premium revenue and the Japanese population is shrinking and ageing.
Japanese insurers have been acquiring overseas assets in a bid to move away from a stagnant domestic market.
In May, Japan's largest private-sector life insurer, Nippon Life Insurance agreed to pay 4.87 trillion rupiah ($414m) for a 20% stake in Indonesia's Sequis Life.
Dai-ichi in 2013 said it was prepared to spend 300bn yen in mergers and acquisitions over the next two years.
Dai-ichi acquired a 40% stake in Indonesia's Panin Life for $337m in 2013. The Japanese insurer bought Tower Australia Group for $1.2bn in 2010.
The biggest acquisition by a Japanese insurer thus far is Tokio Marine Holdings' purchase of US-based property and casualty insurer Philadelphia Consolidated Holding for approximately $4.7bn in 2008.