Aviva Mulls Co-Operating Insurance Arm Bid - Report

U.K. insurer Aviva PLC (AV.LN) is mulling a 650 million pound ($989.82 million) takeover of the Co-operative Group's (COG.YY) insurance business, The Sunday Times reports without citing sources.

The U.K.'s largest mutually-owned business has put its insurance operation up for sale to raise funds to support its attempted acquisition of 632 branches from Lloyds Banking Group PLC (LYG), the newspaper says.

Aegeas, the re-branded U.K. operations of Belgian financial services group Fortis are among other potentially interested bidders, the newspaper says.

The Co-op has appointed Deutsche Bank AG to sell the business, which insures cars, homes and pets, the newspaper says. The process is at a very early stage, although prospective bidders were contacted last week, it says, without saying where it got its information.

The Co-op has been in exclusive talks for over a year to buy the bank branches Lloyds must sell by the end of November to meet a European Union condition on state aid it received in the financial crisis.

Aviva wasn't immediately unavailable for comment.

Newspaper website: http://www.timesonline.co.uk

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