New Zealand insurer Tower Ltd listed in both the NSX and the Australian Stock Exchanges (TWR: NSX/ASX) has announced that it offers to buy industry rival Fidelity Life Assurance Co. for about $118 million.

In an issued disclosure to the ASX and NSX, the company has until October 15 to fulfill its offer of NZ$82 a share for Fidelity. This is $2 higher than the last market value traded for Fidelity at NZ$80 a share.

Tower chairman Tony Gibbs said in the statement that the merger if fulfilled would further strengthen them as one of the key insurance providers serving the requirements of New Zealanders as most competitors are from abroad.

The statement added that Tower further evaluate the financial position of Fidelity. Tower's financial advisor for this undertaking is Goldman Sachs and Financial Partners.

Tower shares rose 4 cents, or 2.2 percent, to NZ$1.87 at the 5 p.m. market close in Wellington.

In another statement, Fidelity responded that this offer from Tower is completely unsolicited and it will not change the rights of bondholders.

The operations of Tower comprise the following core business units:

Tower Health & Life, providing health and life insurance to the retail and group markets in New Zealand. Another is General Insurance, providing home, car and travel insurance to the retail and commercial markets in New Zealand and the Pacific Islands; while TOWER Investments, specifically wholesale and retail funds management, KiwiSaver, individual and group superannuation in New Zealand.

Fidelity provides life insurance, personal protection, business insurance, and savings and investment products in New Zealand. The company also provides KiwiSaver superannuation products. Fidelity has its head office in Auckland and an underwriting centre in Wellington and sales offices in Christchurch and Tauranga. Fidelity Life was founded by Gordon and Shirley Watson in 1973 with a vision of a New Zealand owned and controlled life-insurance company.