Standard Life Plc, an Edinburgh based UK insurer, said that it is selling its medical insurance business Standard Life Healthcare Ltd. for £138 million. Standard Life is selling its healthcare division to a subsidiary of South Africa's Discovery Holdings Ltd.

Standard Life said that its healthcare arm was not core to its UK strategy and now the strategic focus of the company is on the long-term savings and investments market. According to the deal, Discovery Holdings Ltd., which owns South Africa's largest medical insurance administrator, has agreed to pay £138 million for Standard Life Healthcare Ltd.

The deal is expected to complete by July 31, subject to approval by the FSA and the South African Reserve Bank. The deal also revealed that around 562 employees will be transferred from Standard to Discovery as part of the transaction. Discovery said that the acquisition of Standard Life Healthcare Ltd. is a part of its overseas expansion strategy.

Discovery expects that the private health care in the U. K. may grow as the government cuts spending. "We think the UK has got great opportunities. The National Health Insurance is going to see budget cuts," said Adrian Gore, chief executive officer of Discovery. On the other hand, Standard Life said that it will use the money provided by this transaction for general corporate purposes including the acceleration of plans to grow the business.