Irish Life & Permanent will sell its door-to-door life assurance sales business to Royal Liver for £136.5 million (€173.3 million).

The two companies have been in negotiations since June with the deal expected to be completed in the first quarter of 2002.

The business, known as the industrial branch, collects insurance premiums from policyholders' homes and is a distinct operation within the Irish Life group. It employs around 170 people, 153 of whom will transfer to Royal Liver.

The remaining staff will be redeployed within the Irish Life & Permanent group.

Royal Liver has agreed to pay £18.5 million for the infrastructure and operating assets and a further £118 million for the business's other assets. Both payments will be made in cash. Irish Life & Permanent said the benefits to customers under their life assurance policies would be safeguarded under the sale.

Royal Life is already a leading provider of door-to-door insurance premium sales in the Irish market and is strengthening its position through this acquisition.

Irish Life said it was selling the business following a comprehensive review of its business. The industrial branch currently represents just about 1 per cent of its new business.

The deal will have to be approved by the High Court and an independent actuary will have to confirm that the sale will not adversely affect the benefits of policyholders.

Royal Liver employs 700 staff in the Republic. Commenting on the deal yesterday, its chief executive, Mr Brian McCaul, said it would boost its solvency and confirm its position among the strongest life assurers in Ireland and Britain. It will also add £250 million to its funds under management.

Irish Life chief executive Mr Denis Casey said the deal would enable it to focus on its other retail activities.