UPDATED:: An agreement has been reached by Union Assurance PLC, a subsidiary of John Keells Holdings PLC to divest 78 percent stake, which is approximately Rs. 3.5 billion in its General Insurance business to Fairfax Asia Limited.

While commenting on this transaction, John Keells Group Deputy Chairman and Union Assurance Chairman Ajit Gunawardena told adaderanabiz.lk that the company would retain the balance 22 percent of its General Insurance business.

“We expect this to be a joint venture between Union Assurance General Insurance and the Canadian company,” Gunawardena further added.

This agreement has been entered into in compliance to the regulatory conditions in Sri Lanka that an insurance company should segregate its Life and General insurance businesses.

Union Assurance’s overall valuation of the General Insurance business is approximately Rs. 4.5 billion.

Fairfax Asia Limited is a subsidiary of the Canadian financial services group Fairfax Financial Holdings Limited.

This transaction is expected to close by the first quarter of 2015 and further information would be provided in due course, says Union Assurance.

Union Assurance adds that it would continue to retain ownership of its Life Insurance business in its entirety.