UPDATE 2-Resolution in talks to buy Axa UK units
* Buyout firm confirms talks with Axa on UK business
* Resolution would merge unit with Friends Provident arm
* Deal would cost around 2.8 billion pounds
LONDON, June 12 (Reuters) - British buyout firm Resolution Group (RSL.L) is in talks about buying the UK life operations of French insurance group Axa (AXAF.PA) in a deal that would cost around 2.8 billion pounds ($4.1 billion).
A person close to the matter told Reuters that Resolution, a vehicle set up by insurance entrepreneur Clive Cowdery, had made an informal offer and hoped to make a firm offer in about two weeks. The source also confirmed the likely price.
"In response to recent press speculation, Resolution confirms that it is in discussions regarding a potential transaction concerning AXA's life operations in the UK," Resolution said in a statement.
"If implemented, this transaction would result in the acquisition by Resolution of the majority of AXA's life assurance operations in the UK, including its businesses in the risk areas of protection and annuities and also its group pensions business," it added.
Resolution said that a combination with its Friends Provident arm would create one of Britain's largest providers of protection products and group pension services. It would also give Friends Provident a presence in annuities, an area where it dos not have any great scale.
The company said last month that its shareholders were ready to fund a big deal in insurance this year and predicted the finanial services sector would be reshaped through mergers in 2010. [ID:nLDE6441QM].
"Resolution intends to consolidate the AXA businesses with its Friends Provident operations, consistent with its view that value for shareholders can be created from consolidation in the UK life and pensions market, particularly in the areas of risk and group pensions," the company statement said. (Additional reporting by Victoria Howley; writing by Keith Weir)
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