Fairfax Financial Holdings Limited (TSX:FFH) is in early talks to sell 25% of ICICI Lombard General Insurance Company Limited in a deal that could fetch up to $1 billion, as the Canadian firm looks to cash out and start a new insurance joint venture, sources familiar with the matter said. Private equity firms, including The Blackstone Group L.P. (NYSE:BX) and KKR & Co. L.P. (NYSE:KKR), as well as some Canadian pension funds have expressed interest in Fairfax's stake, the sources said.

ICICI Bank Limited (NSEI:ICICIBANK) may also look to sell 10% stake in the unit at the same time, one source said. Buyers are likely to pay a larger premium for a stake in ICICI Lombard if they are able to get as much as a third of the company, the sources said. Two sources said a deal is likely to be finalized in the next two months.

ICICI, Fairfax, Blackstone and KKR did not respond to requests for comment. The sources, who declined to be named as they are not authorized to publicly discuss the matter, said discussions are in the early stages and it was not yet clear what any final deal would look like. Fairfax has not yet chosen a bank to run a sale process, they said.