Great-West Life close to buying state-rescued insurer Irish Life - source

DUBLIN Sun Dec 23, 2012 12:14pm GMT

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DUBLIN (Reuters) - Canada Life, a unit of Canadian life insurer Great-West Lifeco (GWO.TO), is close to a deal for state-rescued insurer Irish Life, a source familiar with the negotiations said on Sunday.

"It's at an advanced stage," the source said, requesting anonymity because he is not authorised to speak about the talks.

A spokesman for Irish Life declined to comment.

Irish Life, formerly the life insurance arm of bailed out Irish Life & Permanent, was taken over by the state after a planned sale of the unit was suspended last year. A source at that time told Reuters that Canada Life was the lead candidate to buy the group.

The Sunday Times newspaper reported that a deal would be agreed in the first quarter of next year.

Executives at Irish Life said in September that the company would need a period of sustained calm in the euro zone before the sale process would resume.

Ireland's government, which had already poured 2.7 billion euros (2.2 billion pounds) into IL&P to recapitalise its banking division, forked out 1.3 billion euros for Irish Life after a real estate and credit bubble burst, undermining the country's banking system and eventually forcing the government to seek a bailout.

(Reporting by Carmel Crimmins; Editing by Ruth Pitchford)