Bupa, the UK health insurer, has confirmed its intention to create Australia's biggest health fund by merging its local division with MBF, the market's second biggest player. The bid is around £740 million.
Bupa, the third largest health insurer in Australia, had held initial talks with MBF, which came to nothing.
Bupa Australia is seeking regulatory approval for the proposal, and is keen to return to the negotiating table before the planned demutualisation of MBF at the end of the year.
A tie-up between Bupa and MBF would challenge the country's state-owned Medibank Private for leadership of a A$10 billion market just as the Australian Government prepares to sell off the rival if it wins this year's federal election.
Bupa Australia wants to merge its Australian businesses, HBA and Mutual Community, with MBF into a nationwide Bupa Australia
MBF has about 800,000 policyholders.