Zurich Financial Services and Deutsche Bank have agreed on an additional asset swap to complement September's deal to exchange two of their units.

Under the deal reached in September, Zurich is to acquire Deutsche's insurance arm plus cash and other businesses for the Swiss firm's US fund unit.

In a statement on Tuesday, Zurich said the deal was being broadened, and that it would also acquire 100 per cent of financial services distributor Bonnfinanz and asset management advisory firm DGV in return for its asset management businesses in Germany and Italy.

The latest accord emerged as Zurich and Deutsche concluded the deal that cements a broad strategic cooperation agreement between the big Swiss-based insurer and Germany's biggest bank.

Zurich is selling its US-based fund unit, Zurich Scudder Investments, to Deutsche for $2.5 billion (SFr4.1 billion) while buying Deutsche's Deutscher Herold Insurance group and Deutsche life insurance operations in Italy, Spain and Portugal for €1.5 billion (SFr2.2 billion).

Capital gain

The two groups are also agreed on mutual distribution of products and services, Zurich said in its statement.

"Zurich Financial Services expects to realise net proceeds of approximately $700 million and a substantial capital gain after tax," the company said in its statement.

The transactions are set to close in the first half of 2002.

Complementing its leading positions in Switzerland, the US and Britain, the deal with Deutsche will allow Zurich to expand as one of the top five insurers in continental Europe and in the rapidly growing life business.

It also gives it access to one of the largest retail banking networks through 2,000 branches in Germany, Italy, Spain and Portugal, it said.

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