Fairfax Financial Holdings Ltd. is in early talks to sell a 25% stake in its India-based joint venture ICICI Lombard General Insurance Co. Ltd. for up to $1 billion, Reuters reported, citing "sources familiar with the matter."

Fairfax owns a 35% stake in ICICI Lombard, its venture with ICICI Bank Ltd., and intends to reduce it to 10% to allow it to start a new general insurance joint venture in India. The company has, however, not yet engaged a bank to run a sale process, according to the report.

Private equity companies, including Blackstone Group LP and KKR & Co. LP, and some Canadian pension funds have expressed interest in acquiring Fairfax's stake in ICICI Lombard and a deal is likely to be finalized in the next two months, Reuters reported. ICICI may also look to sell a 10% stake in ICICI Lombard, the news outlet added.

Fairfax may use some of the proceeds from the transaction to fund its acquisition of Allied World Assurance Co. Holdings AG.