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The transaction is valued at R1.56bn.
In a Stock Exchange News Service announcement on Tuesday, Discovery CEO Adrian Gore advised shareholders: "Since the launch of PruHealth in 2004, the UK has been a key focus in Discovery's international strategy. The UK has a large, well-developed financial services market which is receptive to the consumer-driven product philosophy that Discovery has brought to both the health insurance and protection industries.
"The continued trend towards wellness and consumerism, as well as the increased financial pressure that the National Health Service is expected to face as a result of tighter public spending, creates significant growth opportunities for Discovery's innovative, integrated model."
PruHealth is a joint venture between Discovery and UK insurance giant Prudential. Standard Life is expected to merge with PruHealth as a capital investment.
The merged entity will have more than 700 000 lives on its books.
More information about the deal is expected later on Tuesday, when Gore will speak to analysts and investors during a conference call.
In a snap response to the announcement, stockbrokerage Independent Securities commented that the price of the transaction "looks good".
Shares in Discovery were off 1.3% (49c) to 3 631c after the announcement. The JSE Financial Index was off 0.4%, while the All-share index was down 0.8%.
- Fin24.com
