* Deal would round out Rakuten's financial services
* News comes on heels of WalMart partnership, 4G ambitions
* Asahi a small player in Japan non-life insurance market (Recasts with launch of tender offer, adds analyst comment)
By Minami Funakoshi and Sam Nussey
TOKYO, Jan 29 (Reuters) - Japan's Rakuten Inc said it planned to purchase Asahi Fire & Marine Insurance Co Ltd for about $415 million, strengthening its portfolio of financial services as its steps up efforts to diversify beyond conventional online shopping.
Although Asahi Fire & Marine, majority owned by Nomura Holdings Inc, is a small player in Japan's $76 billion property and casualty insurance market, the acquisition would round out Rakuten's financial offerings that also include online securities trading, credit cards and life insurance.
It would also help differentiate Rakuten's services as it seeks to ward off increased competition from Amazon and Yahoo Japan Corp which has eaten into its market share.
Protecting and improving its earnings has assumed more importance since Rakuten said in December it will apply for a 4G mobile licence, aiming to become Japan's No. 4 wireless carrier in a strategic shift that had analysts warning of an uphill battle to gain customers.
"This is one of the missing parts," said Mitsunobu Tsuruo, an analyst at Citigroup. "Having a comprehensive (financial services) portfolio is definitely a competitive edge against the challengers."
A successful acquisition could also allow Rakuten to provide its own insurance for goods sold as well as for travel services arranged through its websites, said Rakuten spokeswoman Chiemi Kobayashi.
The news also comes on the heels of an announcement last week that Rakuten has struck a partnership with Wal-Mart Stores Inc for online grocery delivery services in Japan.
Rakuten said on Monday it would launch a tender offer for unlisted Asahi Fire & Marine at 2,664 yen per share. The non-life insurer has annual net premium revenue of 36.6 billion yen, while top insurers have revenues of about 2 trillion yen.
Helped by its vast customer base from its online shopping services, revenue from Rakuten's financial services has grown to account for 38 percent of overall sales in the last financial year. That is just behind its domestic e-commerce business, which accounted for about 40 percent of sales.
Nomura, which owns more than 50 percent of ordinary shares in Asahi Fire & Marine, said in a statement it intended to participate in the offering.
Japan's biggest brokerage and investment bank has been seeking to shift capital into areas where it sees more growth. It is expanding its U.S. investment banking business, with a focus on M&A advisory services as it tries to grab a bigger share of the world's biggest investment banking fee pool.
Shares in Rakuten fell 0.7 percent on the day, giving it a market value of about $13.3 billion.
$1 = 108.7400 yen Additional reporting by Kaori Kaneko, Taiga Uranaka and Thomas Wilson; Editing by Edwina Gibbs