(Bloomberg) -- Sanlam Ltd., the biggest South African- owned insurer, has ended talks to buy the U.K. life-insurance unit of General Electric Co.

The Cape-Town based company said a month ago that it was in ``early talks'' to acquire GE Life in Britain to expand outside its home market.

``Such discussions have been terminated,'' the insurer said today in a regulatory filing with South Africa's stock exchange. Sanlam will continue ``to evaluate alternative options to optimize its use of capital.''

Calling off the talks is ``probably a good thing as the market wasn't that positive on the acquisition,'' said Ian Troost, who helps manage about $9.3 billion at Metropolitan Asset Managers in Cape Town. ``Investors couldn't see too many synergies flowing from such an acquisition.''

Should Sanlam find no suitable acquisition targets, the insurer may return excess cash to investors or buy back shares, Chief Executive Johan Van Zyl said. Sanlam has 1.5 billion rand in surplus capital that may rise to 5 billion rand with the raising of debt and as the company reorganizes some investments, Van Zyl said.

Shares of Sanlam rose 20 cents, or 1.2 percent, to 16.30 rand at 12 p.m. in Johannesburg. The stock has gained 49 percent over the past year, giving Sanlam a market value of 40.4 billion rand ($6.2 billion).

GE Life may be worth as much as 500 million pounds ($930 million), the Financial Times reported on April 23.

GE, based in Fairfield, Connecticut, in March sold its stake in the life and mortgage insurer Genworth Financial Inc., for $2.8 billion as it exits insurance to focus on faster-growing areas such as consumer finance. The $7.6 billion sale of its reinsurance business to Swiss Reinsurance Co. is scheduled to be completed next month. GE is the world's second-largest company by market value.

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To contact the reporter on this story:
Vernon Wessels in Johannesburg at  vwessels@bloomberg.net

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