British bank Lloyds TSB Group said that its Scottish Widows subsidiary will sell Abbey Life Assurance Co. to Deutsche Bank AG for 977 million pounds ($1.98 billion) in cash as the German bank expands its insurance operation.
Abbey Life managed 12 billion pounds ($24 billion) of assets involving 1.2 million policies as of Dec. 31, 2006. Scottish Widows will continue to manage Abbey Life’s funds under a 10 year contract.
Michele Faissola, Deutsche Bank’s head of global rates, said that the company was confident that Abbey Life would deliver stable returns.
“We see significant convergence between insurance business and capital markets and believe that we are optimally placed to act as a principal to enhance yields and manage risk for the benefit of all stakeholders in the business,” she said.
The Abbey Life sale is conditional on regulatory approval, Lloyds said, with completion expected in the second half of this year.
Lloyds shares rose 4 percent to 556 pence ($11.29) on the London Stock Exchange.
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