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Canadian insurance company Great-West Life has agreed to buy Irish state-owned insurer Irish Life for Can$1.75 billion ($1.75 billion, 1.31 billion euros), it said Tuesday.
Winnipeg, Manitoba-based Great-West said it will combine the operations of its 110-year-old Irish subsidiary, Canada Life, and Irish Life. The new entity will retain the Irish Life name.
The insurance arm of Irish Life & Permanent, Irish Life is the largest life and pensions group and investment manager in Ireland, with more than one million customers and 37 billion euros of assets under management.
"The acquisition of Irish Life is transformational for our companies in Ireland," Great-West chief executive Allen Loney said in a statement.
"It allows us to achieve -- with a single transaction -- the leading position in life insurance, pensions and investment management" in the country.
Dublin bought Irish Life last year after efforts to sell it as part of a recapitalization of its parent company, taken over by the Irish government int he financial crisis, had failed.
Great West was reportedly a top bidder then, but withdrew amid growing European debt turmoil. Negotiations with Great West resumed in December.
"Today's deal is the first time during this crisis that a company in which we have invested has been returned fully to private ownership," Irish Finance Minister Michael Noonan said in a statement.
"This is a historic transaction and provides the Irish taxpayer with a full return on its investment in Irish Life," he said.
The sale came as Ireland, under a bailout restructuring program from the International Monetary Fund and the European Union, seeks to cut its debt burden to meet program goals.
Combined with the issue of Bank of Ireland convertible debt in January, the sale of Irish Life lowers the country's borrowings below 120 percent of gross domestic product.
It also recoups part of the cost to the government of bailing out Ireland's financial system.
The deal is expected to close in July, subject to regulatory approvals.