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AXA in talks to buy Genworth LPI for 475 mln euros

Reuters - UK Focus

* Deal to create No. 3 European creditor insurer

* Companies expect to close deal before end of 2015

* AXA (Paris: FR0000120628 - news) says deal to be modestly accretive to underlying earnings (Adds details from Genworth statement, CEO comment, share price)

PARIS, July 22 (Reuters) - French insurer AXA said it is in exclusive talks to buy Genworth Lifestyle Protection Insurance (LPI) for 475 million euros ($520 million) in cash to create the third-biggest player in the European creditor insurance market.

Genworth Financial (NYSE: GNW - news) said in a statement that it expected to accept the offer for the unit and that it would record an after-tax loss of about $310 million in the second quarter related to the sale and pension settlement costs.

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AXA said the deal would complement its credit and lifestyle protection business in mature markets such as France, Germany and Italy, as well as helping it to enter promising new markets such as Scandinavia and Southern Europe.

"The combined operations would rank No. 3 within the creditor insurance market in Europe, with a 9 percent market share, and would be a European leader in credit and lifestyle protection," AXA said in a statement.

Lifestyle insurance covers users' incomes in the event of accidental injury, illness or redundancy.

AXA said it hoped to complete the purchase by the end of the year, adding that it would have a modestly positive impact on underlying earnings. The company said it would give more details at a later date.

In 2014, Genworth LPI had revenue of $951 million, while net operating income was $8 million. It is headquartered in London, with around 800 employees.

"This transaction is another important step toward simplifying our business portfolio and increasing the financial flexibility and strength of Genworth," Genworth President and Chief Executive Tom McInerney said.

Genworth has been looking to sell its non-core LPI business since late 2012. Barclays (LSE: BARC.L - news) and Sidley Austin LLP are advising Genworth on the transaction.

Shares (Frankfurt: DI6.F - news) in AXA were 0.2 percent lower by 0820 GMT at 24.31 euros. ($1 = 0.9134 euros) (Reporting by James Regan; Editing by Mark John)