Insurance company Rothesay Life is planning a £3.5bn takeover bid for a unit of Swiss Re, derailing plans to list it on the stock market.
Rothesay approached reinsurance firm Swiss Re a few weeks ago about the possibility of buying ReAssure, the company's British closed books division, according to Sky News.
The company plans to a make a formal offer in the coming weeks.
Swiss Re announced last year that it would list ReAssure on the stock market because it did fit in line with the company's main reinsurance business.
The difficult market conditions alerted bidders to the possibility of an outright sale and could now convince Swiss Re to abandon the flotation.
"Given the size of potential opportunities that are expected to arise in the market in the mid-term, it is important for ReAssure to have access to substantial new capital to acquire additional closed books," Swiss Re said last month.
The purchase would continue a series of bold acquisitions from Rothesay.
Last year it bought a £12bn annuities book from FTSE-100 insurance group, Prudential, and an £860m portfolio of equity release mortgages from British taxpayers.
London-based Rothesay and Zurich-listed Swiss Re were not immediately available for comment.