Lloyds Banking Group, a 40% government-owned UK lender, is mulling to divest its German insurance business Heidelberger Leben to Frankfurt-listed insurer Hannover Re, in a transaction valued at approximately €400m ($533m).
As part of the plan to streamline operations, the banking group is selling its various businesses worldwide to shore up capital as well as refocus on the UK retail banking market.
Negotiations over the deal are currently ongoing, and an announcement pertaining to the proposed transaction is likely to be made this week, media sources reported.
Post-sale, the UK lender, which received a bailout package of $31bn during the financial crisis of 2008, will continue to offer life insurance to German customers through its Clerical Medical brand.
Many insurers as well as private equity companies, including JC Flowers and Wilbur Ross have expressed their interest to acquire Heidelberger Leben, which caters life insurance services to its customers.
In 2005, the insurer that offers services to nearly 300,000 clients was acquired by Halifax Bank of Scotland, a wholly owned subsidiary of the Lloyds Banking Group, which was merged during the global financial crisis.
It is also considering disposing of an assortment of US residential mortgage-backed securities (RMBS) to various organizations, in a cash transaction valued at nearly £3.3bn.
