(Corrects to specify sale is of Generali Leben (not whole German life insurance portfolio), headline and paragraphs 1,3)
MILAN, July 5 (Reuters) - Italy's biggest insurer Generali said on Thursday it would sell 89.9 percent of its German life insurance unit Generali Leben to Viridium in a deal that would value the company at up to 1 billion euros.
Generali Leben was put up for sale last year and Viridium has been vying with Fosun-backed peer Frankfurter Leben and Apollo-backed Athora for the asset, sources have said. Reuters reported the exclusive talks with Viridium last week.
Generali Leben represents 36 percent of the insurer's life insurance portfolio in Germany.
The total estimated cash-in will be up to 1.9 billion euros and Generali Investments Europe will manage the Generali Leben assets for a 5-year period, receiving total fees of 275 million euros, Generali said in a statement.
Viridium is 80 percent owned by buyout group Cinven with reinsurer Hannover Re holding the rest. It has 15 billion euros in assets under management after the acquisitions of three smaller so-called "back book" portfolios.
The deal "is in line with the Group's strategic ambition of rebalancing its portfolio, significantly reducing exposure to interest rate risk and improving return on risk capital," Generali said.
As part of the deal, Generali will have the option of taking a minority stake in Viridium.
Reporting by Giulia Segreti; editing by Jason Neely