Manulife Financial Corporation's (MFC) Manufacturers Life Insurance (MLI) is set to acquire Canada-based operations of Standard Life, for around $4bn in cash.
An agreement to this effect has been signed with Standard Life subsidiary Standard Life Oversea Holdings to acquire Standard Life’s Canadian operations.
The acquisition will help Manulife to expand operations around the globe, including segments such as Group Benefits, Group Retirement, several areas of Asset Management and Investment Risk Oversight, as well as Liability-Driven Investing.
Manulife president and CEO Donald Guloien said that Standard Life decided to explore the sale of its Canadian operations through a competitive process, several months ago.
"Excluding transition and integration costs, after the first year we expect the transaction to be accretive by approximately 3ยข to EPS per year over each of the next three years," Guloien added.
Standard Life, which has around 2000 employees and 1.4 million customers, is said to be the fifth largest life insurer in Canada.
The company provides long term savings, investment and insurance solutions to the Canadian market, with around $52bn of assets under management.
The integration of operations is expected to take between 18 and 24 months, so there will be no significant immediate job losses, according to Manulife.
Standard Life chief executive David Nish said: "The sale of our Canadian operations to Manulife, and the formalising of a collaboration agreement in principle to distribute Standard Life Investments’ products via Manulife’s network in Canada , the US and Asia , is a significant moment for both organizations."
The transaction, which is expected to be completed in the first quarter of 2015, is subject to regulatory approvals and the approval of the shareholders of Standard Life.
Image: Manulife president and CEO Donald Guloien and Standard Life chief executive David Nish officially announced the acquisition of Canadian operations of Standard Life. Photo: courtesy of CNWGroup/ Manulife Financila Corporation.