UPDATE 3-Canada's Great-West Lifeco buys Irish Life for $1.7 bln

Tue Feb 19, 2013 4:15pm EST
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* Irish govt gains full return of its outlay

* Great-West Lifeco expects 10 pct earnings boost

* Irish finance minister to explore further potential sales

* Great-West shares rise 2.4 pct

By Padraic Halpin

DUBLIN, Feb 19 (Reuters) - Canadian life insurer Great-West Lifeco bought state-rescued insurer Irish Life for 1.3 billion euros ($1.7 billion) on Tuesday in a deal that increases its presence in Ireland and lightens the Irish government's debts.

Ireland last year paid the same amount to take over Irish Life, formerly the insurance arm of bailed-out Irish Life & Permanent, after the euro zone debt crisis forced the suspension of its sale in late 2011.

Great-West Lifeco, which plans to merge Irish Life, the country's largest life and pensions company, with its own Irish unit, Canada Life, was the lead candidate to buy the group before pulling out of the original sale process at the height of the euro zone financial crisis.

Since then, the country's recovery has been "transformational", said Great-West Lifeco Chief Executive Allen Loney, making the opportunity to turn Great-West's relatively small Irish operation into a market leader too appealing to pass up.   Continued...