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UPDATE 2-Generali buys U.S. asset manager Conning under deal with Cathay Life

(Adds quotes from Generali exec, details)

MILAN, July 6 (Reuters) - Generali has agreed to buy Connecticut-based asset manager Conning Holdings as part of a partnership with Cathay Life, a unit of Taiwan's Cathay Financial Holding, the Italian insurer said on Thursday.

The deal, structured as an exchange of assets without a cash consideration, realises Generali CEO Philippe Donnet's ambition of expanding into the asset management sector in the United States.

Under its current three-year plan, Generali had been seeking acquisition targets in insurance and asset management, earmarking up to 3 billion euros ($3.25 billion) for M&A transactions and citing possible deals in Europe, Asia and the United States.

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The insurer studied several potential U.S. acquisition targets in recent months before deciding to buy Conning.

Cathay Life will become a minority shareholder in Generali Investments Holding, which comprises the majority of the group's asset management activities, with a stake of around 16.75%, Generali said.

The deal takes Generali into two strategic areas -- the United States where it was not active in the industry, as well as expanding in Asia through the partnership with the seller, said Carlo Trabattoni, the head of Asset & Wealth Management for Generali.

Furthermore Generali will become one of the top 10 players in asset management in Europe, he added.

Generali and Cathay Life will enter an asset management agreement for at least 10 years.

Conning, which will retain its current management team led by CEO Woody Bradford, has around $157 billion in assets under management, serving insurance and institutional clients in the United States and Asia.

The acquisition of Conning and its affiliates increases Generali's total Assets Under Management (AUM) to $845 billion (775 billion euros), up from 620 billion euros at the end of March.

The deal, whose closing is expected in the first half of next year, is subject to customary regulatory approvals.

($1 = 0.9221 euros) (Reporting by Gianluca Semeraro; writing by Valentina Za Editing by Keith Weir)