Phoenix Group Holdings, Britain's largest owner of life assurance funds closed to new customers, said it was in advanced discussions with Deutsche Bank about the possible acquisition of its British insurance business, Abbey Life Assurance.

The German lender was nearing a deal to sell the business to Phoenix, a source said.

Phoenix is planning to raise £800 million (€940 million) to fund the purchase, which will be finalised in the next couple of weeks, the source said.

Scouting for acquisitions

Phoenix said on Friday that it continued to explore further acquisition opportunities in the UK closed life sector. Phoenix chief executive Clive Bannister told Reuters in August that the company was scouting for acquisitions to help gain scale in a challenging, low interest rate environment after Brexit.

Regulatory changes and rock-bottom interest rates had ramped up pressure on industry players to deal with their legacy books, leading many to consider putting them up for sale. The interest rate cut that followed Britain’s vote to leave the European Union has also squeezed returns on investments for companies that manage closed life insurers.

Deutsche Bank began weighing the sale of Abbey Life in October last year, attracting interest from Swiss Re unit Admin Re, Phoenix and Legal & General Group Plc among others, sources familiar with the matter have told Reuters. Abbey Life, which was bought by Deutsche Bank for £977 million in 2007, is valued at about £1 billion, sources told Reuters in June. – (Reuters)