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AMSTERDAM (Reuters) - Dutch insurer Delta Lloyd DLL.AS has scrapped the sale of its German business to Japanese bank Nomura (8604.T), the company said on Friday, blaming a weak economy and problems gaining approval from the German regulator.
Banks and insurers across Europe are selling assets and cutting costs as they try to recover from the financial crisis and meet tougher new regulations. But many are struggling to strike deals because of a faltering global economy and unsettled markets.
Delta Lloyd put the unit up for sale in 2011, and said it could keep the business if Nomura offered less than an undisclosed minimum price. That price was not reached, a Delta Lloyd spokesman said on Friday.
"The discussions with (the regulator) BaFin, which looks at the insurance obligations, were postponed repeatedly. That was more difficult than we expected. The economic conditions also remained bad," the spokesman said.
Delta Lloyd has a stock market value of about 2 billion euros ($2.58 billion). The German business accounted for 8 percent of its interest income last year.
"This is disappointing given that Delta Lloyd's German activities (worth nearly 650 million euros) are performing poorly and the insurance book is unattractive to retain," SNS Securities analyst Lemer Salah said in a note.
Delta Lloyd shares were down 1.3 percent at 11.04 euros by 1103 GMT, compared with a flat Amsterdam midcap index .AMX.
British insurer Aviva (AV.L) owns a 18.4 percent stake in Delta Lloyd after listing it in 2009.
Delta Lloyd will either try again to sell the German business or manage it until all policies mature, its Chief Executive Niek Hoek told investors and analysts in a conference call.
"Even if we would run it off completely it would not be a problem," Hoek said.
Last month, Royal Bank of Scotland (RBS.L), also under pressure from European regulators to sell assets, saw a deal to sell 316 UK branches to Spain's Santander (SAN.MC) collapse. Earlier this week, Dutch financial services group ING won more time sell its insurance operations.
Delta Lloyd had expected to make a book profit of 65 million euros on the sale to Japan's largest investment bank, factoring in tax benefits and a foreseen deterioration of the property portfolio.
The German business had premium income of around 350 million euros last year, about 6 percent of the group total.
Editing by Tom Pfeiffer