Tokio Marine, backed by Berkshire Hathaway, is closing in on its largest acquisition after months of due diligence on Australian and Canadian targets. CEO Masahiro Koike aims to diversify Japan's largest financial services company through a multibillion-dollar international takeover. The insurer has reviewed targets including Australia's Insurance Australia Group (IAG) and Suncorp, as well as Canada's Intact Financial Corporation.

Two people with direct knowledge said Suncorp has emerged as the preferred target, with Intact deemed too large. Discussions remain ongoing with no certainty of a deal. Suncorp shares rose over 7% on Tuesday, while IAG gained 4.5%.

Berkshire Hathaway acquired a 2.5% stake in Tokio Marine in March, including an agreement to cooperate on large-scale international M&A using Berkshire's balance sheet and Tokio Marine's operational expertise. Since 2008, Tokio Marine has completed five major international deals worth roughly $19bn, including a $7.5bn purchase of US-based HCC. The potential deal would preserve Tokio Marine's firepower for domestic investment.

Suncorp, which sold its banking arm to ANZ in 2024, posted a A$1bn net profit this month and announced a special dividend and share buyback under CEO Steve Johnston.