Goldman Sachs has agreed to acquire the variable life insurance and variable annuity business of Allmerica Financial Corporation. The purchase includes the life insurance subsidiary, Allmerica Financial Life Insurance and Annuity Company.

Allmerica Investment Trust, an approximately $3 billion mutual fund complex owned by Allmerica, will be merged with Goldman Sachs Variable Insurance Trust in connection with the purchase, which is expected to close later this year.

Goldman Sachs, a global investment banking, securities and investment management firm, will pay approximately $275 million cash upfront and about $70 million over three years for the Allmerica Financial units, though the deal is still subject to normal regulatory and policyholder approvals.

The variable life insurance and variable annuity business, which is now no longer open to new policies, represents an approximate total of $11 billion in assets and almost 200,000 policyholders. Goldman Sachs and Allmerica said in a statement that both companies are committed to ensuring a smooth transition and continued high level of service for all policyholders.

Allan Levine, managing director and head of Goldman Sachs’ Reinsurance business, said, The addition of this acquisition to our existing reinsurance business will enhance our ability to help life insurance companies looking to manage risk and free up capital from their closed or in-force businesses.