Canada Life ‘leading contender’ to buy Irish Life for more than €1bn

GREAT-West Lifeco, Canada’s second-largest insurer, is the leading candidate to acquire Irish Life & Permanent’s life assurance unit, according to two people familiar with the matter.

The Winnipeg, Manitoba-based company’s Irish unit, Canada Life, bid in excess of €1 billion for the insurer, said people who declined to be identified as the process is private.

Department of Finance officials have identified Canada Life to enter exclusive talks on the Irish Life unit, though the Government has yet to ratify this, they said.

The Government is splitting up Irish Life to lower the cost of bailing out the group’s unprofitable bank unit. A joint bid from US leveraged buyout firms JC Flowers &and Apollo Global Management and an offer from CVC Capital Partners had also been shortlisted for the life assurer, three people said on August 19.

Irish Life is 99.5% state-owned after taxpayers put €2.7bn into the company in July.

The Central Bank ordered the company to raise a total of €4bn following stress tests by the Central Bank in March.

Department of Finance spokesman Eoin Dorgan, Irish Life spokesman Ray Gordon and a Canadian Life spokeswoman declined to comment on the process.

The state has injected a total of €62bn into its banking system since it came close to collapse three years ago. Ireland sought a bailout last year, partly to cover the mounting cost of the bank rescue.

The Government is seeking to attract overseas investors for its financial sector.

The state sold a combined 35% stake in Bank of Ireland, the country’s largest bank by assets, last month to a group of investors, including Fairfax Financial Holdings, WL Ross & Co, and Fidelity Investments.