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L&G hires Goldman Sachs to advise on bid for Co-Op insurance unit

By Chris Vellacott

LONDON, Dec 12 (Reuters) - UK insurer Legal & General has hired Goldman Sachs to advise on a possible bid for the general insurance arm of the Co-operative Group, a source familiar with the process said.

The group, which has already sold its life insurance and savings business, expects to sell its general insurance business during 2014.

Legal & General, Goldman Sachs and the Co-op declined to comment.

The Co-op group is battling a capital shortfall at its bank and scandal over alleged drug-taking by its former chairman.

Earlier on Thursday it appointed ex-Treasury minister Paul Myners to review its operations for a token one-pound salary.

L&G Chief Executive Nigel Wilson has pursued a strategy of small, bolt-on acquisitions since the start of 2013 such as the 151 million pounds ($246.53 million) purchase of annuity firm Lucida and its buyout of investment funds supermarket Cofunds.

The firm was also one of six British insurers pledging to invest 25 billion pounds in transport and energy projects over the next five years in support of government attempts to encourage private sector investment in infrastructure.

The Co-op announced it planned to sell its general insurance business in March.