British insurance firm Resolution is to buy the life insurance activities of Abbey National, the British bank owned by Spanish peer Banco Santander Central Hispano.

The deal values Abbey's life insurance businesses at £3.6 billion, Resolution and SCH said in separate statements issued to the London Stock Exchange. Abbey added that it would now focus on the banking sector in Britain. In November 2004, SCH bought former British rival Abbey National for £8.5 billion in a deal that made it the world's tenth-largest bank. Resolution said today that it would buy the British and offshore life businesses of Abbey together with the associated new business infrastructure and service companies.

 The businesses include Scottish Mutual Assurance, Scottish Provident Limited and Abbey National Life. The two offshore life companies being sold are Scottish Mutual International and Scottish Provident International Life Assurance Limited.

The acquisitions will be funded partly with a £1.54-billion rights issue. Some 2,000 Abbey employees would transfer to Resolution as part of the deal.