Two Japanese financial firms have signed a memorandum of understanding to create what they say will be Asia's top asset management house.

Mizuho Financial Group and Dai-ichi Life Insurance, Japan's second-largest lender and life insurer by assets, respectively, are combining their investment businesses into a group that will be “number one” in Asia.

The firms said they have been in talks about integrating the asset management functions of both businesses.

“MHFG and Dai–ichi Life are now pleased to announce that they have reached basic agreement on integrating the asset management functions of both groups and jointly operating the resulting new company in accordance with the spirit of equal partnership under the comprehensive business alliance between the two companies,” according to a press release on Mizuho’s website. A memorandum of understanding has been signed by both firms, it said.

“As a result of the integration, the new company will be the first joint venture asset management company in Japan, bringing together asset management knowhow in the domains of investment trusts, investment advisory, trust banking, and life insurance,” it said.

The combination of the two businesses will be completed by the first half of the 2016 financial year, the statement continued.

“Voting rights in the new company will be held 51 per cent by MHFG and 49 per cent by Dai–ichi Life. MHFG and Dai–ichi Life will also discuss an economic interest to be held 70 per cent by MHFG and 30 per cent by Dai–ichi Life, taking into account valuations to be conducted by external professionals. The board is planned to be composed of nine directors, with three nominated by each of MHFG and Dai–ichi Life, in addition to three independent outside directors,” it said.

The new company, the name of which has not yet been finalised, will have 54 trillion yen ($449 billion) in assets under management.