Jan. 6 (Bloomberg) -- The Irish government’s prospects of reviving the sale of Irish Life & Permanent Plc’s life assurance unit may be boosted by a venture under discussion with Allied Irish Banks Plc, according to Goodbody Stockbrokers.

Allied Irish is in talks to set up a life and pensions distribution agreement with Irish Life, after terminating an existing contract with Aviva Plc, according to two people familiar with the matter said yesterday.

“The deal will increase Irish Life’s percentage market share from high 20s into the low 30s, making the state-owned enterprise the clear No. 1 player,” said Eamonn Hughes, an analyst at Dublin-based Goodbody, said in a note today. “In time, this will be helpful for the eventual price tag.”

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Dara Doyle at ddoyle1@bloomberg.net