Handelsbanken sells life insurance arm

Norway's biggest insurance group Storebrand said Monday it had agreed with Swedish bank Handelsbanken to buy its life insurance and pension unit SPP for €1.9 billion ($2.6 billion) in cash.

“The combination of Storebrand and SPP will create the leading life insurance and pensions provider in the Nordic region,” Storebrand said.

To finance the deal, Storebrand said it would issue new shares worth 9.0-10.7 billion Norwegian kroner ($ 1.5-1.8 billion) and make use of a temporary banking loan of 4.6 billion kroner.

The final purchase price would be reduced to €1.7 billion if the Swedish regulators approved a special dividend of €200 million paid by SPP to Handelsbanken prior to the closing of the transaction, Storebrand said.