A consortium of German insurer Allianz ALVG.DE and life insurer Athora Holding is in advanced talks to buy Aviva's AV.L French operations in a deal worth between 2 and 3 billion euros ($2.3-$3.5 billion), sources close to the matter said.

Aviva is working with JPMorgan JPM.N and Rothschild on finding a new owner for the unit, which provides life insurance as well as property and casualty policies to French clients, the sources said.

The business has also drawn interest from Axa AXAF.PA, Assicurazioni Generali GASI.MI and French mutual insurer La Mondiale among others, the sources said.

Aviva said in a statement that it was “in the very early stages of developing its strategy for its continental European and Asian businesses”. Allianz, Athora, Axa, Generali and the banks declined to comment.

Discussions with Allianz and private equity-owned Athora kicked off during the summer but have yet to become exclusive, the sources said.

Aviva wants to gauge interest from other bidders before committing to Allianz's proposal, which would see Apollo-backed APO.N Athora take control of the unit's run-off life insurance portfolio while Allianz would swallow its property and casualty assets.

The German insurer, which is already present in France, is also considering a parallel deal to transfer all its existing French run-off portfolio to Athora, one of the sources said.

Aviva’s French operations represent the bulk of the insurer’s European business, with adjusted operating profit of 473 million pounds ($602.1 million) in 2019.

The sale comes as Aviva’s new boss Amanda Blanc is shifting the insurer’s focus purely to its core operations in Britain, Ireland and Canada.

As part of its new strategy, Aviva is also reviewing ways to cash out from Italy and Poland, the sources said.

While smaller in size, a possible exit from Italy is expected in the coming months, with Morgan Stanley winning the mandate to launch a separate sales process for Aviva’s Italian business.

These assets, which mainly consist of “back books” or existing policies with no new ones being issued, are expected to be sold to private equity investors with a track record of insurance investments, the sources said.

European buyout firm Cinven and Athora have shown interest in making rival bids for the Italian unit, the sources said.

Low interest rates and sluggish returns have prompted a number of European insurers to stop issuing new life insurance policies and transfer existing ones to run-off specialists, which can benefit from economies of scale.

Cinven and Athora’s owner Apollo declined to comment.