Danica Pension, Kongens Lyngby, Denmark, agreed to buy SEB Pension for 6.5 billion kroner ($1 billion).
SEB Pension is the Danish pension provider business of Stockholm-based SEB.
Under the deal, SEB will sell all its shares in SEB Pensionsforsikring and SEB Administration, together known as SEB Pension, an SEB news release stated.
The 380 billion kroner Danica Pension is a pension provider subsidiary of Danish bank Danske Bank. SEB Pension, with assets under management of about 103 billion kroner and 275 employees, manages a portfolio of life insurance and retirement contracts.
The deal is set to close in the summer and is subject to regulatory approvals and preparations for separation at SEB, said the release.
Johan Torgeby, president and CEO at SEB, said in the release that the deal is consistent with the bank's strategy to focus on core customer segments.
"To remain competitive and further develop this business (SEB Pension) and its customers, it would require investments in local distribution capacity," he added.
A spokesman for Danica Pension could not immediately be reached for comment.
Abbie Parrott contributed to this story