Hi °C | Lo °C ONE of Canada's richest men, Paul Desmarais, is behind the €1.3bn deal to buy Irish Life from the State. Mr Desmarais is the largest private shareholder in Great-West lifeco, which looks set to take control of State-owned Irish Life.
The Government is understood to be close to a deal to sell Ireland's biggest life insurer to the Canadian firm. Great West Lifeco owns Canada Life, which has a five per cent stake of the Irish market.
Desmarais is listed as Canada's fourth richest person, with a fortune pegged at close to €4bn. Apart from the near €200m stake in Great West Life Co, the 76-year-old controls the Power Corporation of Canada, which has interests in paper, pulp, mass media and financial services. The company has employed not one but three former Canadian prime ministers: Brian Mulroney, Jean Chretien and Paul Martin.
Last November Great West was close to buying Irish Life but the proposed buyout was nixed by an escalation in the euro debt crisis. A number of private equity groups including JC Flowers, Apollo and Delphi were thought to have looked at buying the insurer that was taken over by the State as part of the bailout of its parent Irish Life & Permanent. Irish Life & Permanent's banking arm had massively over-extended itself lending to the property market during the boom, with its loans funded by the inter-bank markets rather than from its own deposits.
This led to a bailout by the Irish taxpayer. The State bought Irish Life for €1.3bn last June.
The strong performance of global stock markets coupled with investors warming to the Irish economic recovery story, saw Great West re-open talks with the Government over a potential buyout. A deal for the insurer would reduce the cost of the €64bn bailout of the banking system.
Last month, the State recouped €1bn through the sale of so-called contingent convertible capital notes in Bank of Ireland.
Irish Independent
