Manulife Financial has agreed to acquire the Canadian operations of Britain’s Standard Life for about C$4-billion in cash.
The acquisition of Standard Life Oversea Holdings by Manulife’s subsidiary, Manufacturers Life Insurance Company (MLI) will expand Manulife’s presence in Quebec.
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The deal will significantly build Manulife’s capability to serve customers across Canada and around the world. It will serve customers in areas such as group benefits, group retirement, asset management, investment risk oversight and liability-driven investing.
Additionally, the deal will expand Manulife’s investment capabilities globally in addition to expanding its wealth and asset management business.
Manulife said the deal builds on an already established wealth and asset management partnership with Standard Life.
The transaction will also increase the Manulife’s earnings capacity beyond 2016 core earnings objective of $4 billion and will add will add three cents a year to earnings per share over the next three years.
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By GlobalDataDonald Guloien, president and CEO of Manulife, said: "In fact, it will enhance our ability to increase dividends in the future. The transaction will improve core earnings, however the transition costs reported in core earnings will create a modest, temporary headwind on our core ROE objective of 13%."
Kai Sotorp, executive vice president of global wealth and asset management of Manulife, said: "It will broaden the range of asset management products and solutions available to our clients in Canada and around the world."
