Prudential Financial Inc. has agreed to buy Allstate Corp.’s $16 billion variable annuity business through a reinsurance arrangement, the companies announced.

Prudential, Newark, N.J., will pay $580.5 million for the transaction, subject to changes in market prices by the closing date, expected to take place by the end of the second quarter. The deal must be approved by regulators, the companies note.

The agreement enables Allstate to exit an end of the financial services business it says has contributed minimally to profits, while for Prudential, it offers an important inroad into previously underserved investment market channels.

Under the arrangement, agents for Allstate, Northbrook, Ill., will still sell VAs under Allstate’s name, but they will be manufactured by Prudential.