French insurance group CNP Assurances (CNP.FR) Thursday said it will pay an initial EUR140 million for a 50% stake in Barclay PLC's (BCS) Spanish and Portuguese life insurance unit as the two groups set up a southern European bank and insurance partnership.

The two groups will also start new life insurance operations in Italy as part of the 25-year alliance, CNP said in a statement.

CNP will take management control of the joint venture and will pay Barclays EUR140 million in cash on completion of the deal. Further payments over a period of 12 years will depend on the performance of the joint venture and Barclays branch openings, CNP said.

The transaction won't have any "material impact" on CNP Assurances' solvency ratio, the insurer said.

-By Jethro Mullen, Dow Jones Newswires; 33 1 4017 1738; jethro.mullen@dowjones.com