Swiss Life to buy German AWD in $1.7 bln deal

FRANKFURT/ZURICH (Reuters) - Swiss Life (SLHN.VX: Quote, Profile, Research, Stock Buzz) advanced a sweeping restructuring on Monday, unveiling plans to buy German investment advisor AWD (AWDG.DE: Quote, Profile, Research, Stock Buzz) in an agreed deal valuing AWD at $1.71 billion.

The deal will give Swiss Life -- its coffers bursting with cash from the recent sales of non-core business units -- access to growth markets in central and eastern Europe and give AWD a long-term strategic partner.

Swiss Life will offer AWD shareholders 30 euros per share in January, a premium of 36 percent over the weighted average share price over the past three months of 22.06 euros, AWD said in a statement.

While AWD's shares were expected to bolt higher at the open, Swiss Life shares were seen falling with some traders expressing reservations about the wisdom of the deal.

"It seems to me as if Swiss Life just bought something because they had all this money from sales," said one Zurich trader.

"AWD claims to be independent and that's all in the past now. AWD is now a sales channel for Swiss Life. An important sales argument for AWD may now disappear," said another.

On Nov 26, Swiss Life unveiled a management reshuffle in the wake of a sweeping restructuring program, with speculation intensifying it could join a round of consolidation in the insurance sector.

Since Nov 7, Swiss Life has sold its lackluster Banca Del Gottardo unit to Italian rival Generali (GASI.MI: Quote, Profile, Research, Stock Buzz), its Dutch and Belgian units to SNS Reaal (SR.AS: Quote, Profile, Research, Stock Buzz) and announced a 2.5 billion-franc ($2.27-billion) share buyback.

It has said it is seeking add-on acquisitions in its core markets and is expected to unveil more aggressive growth targets at an investor day on December 4.