Sun Life Financial has a deal to sell its U.S. annuity unit and certain life insurance businesses for US$1.35 billion to Delaware Life Holdings. THE CANADIAN PRESS/HO
December 17, 2012 - 5:06 AM
TORONTO - Sun Life Financial has a deal to sell its U.S. annuity unit and certain life insurance businesses for US$1.35 billion to Delaware Life Holdings, a company owned by shareholders of Guggenheim Partners.
The U.S. annuity business has been challenging for Sun Life and other Canadian insurance companies in recent year, due to a combination of low interest rates and a substantial increase in the amount of capital required by regulators.
Sun Life says the sale of the U.S. annunity business, which is expected to close in mid-2013, will reduce next year's earnings by about 22 cents per share.
"This transaction represents a transformational change for Sun Life," said Dean Connor, the Toronto-based company's president and chief executive officer.
"It significantly advances our strategy of reducing Sun Life's risk profile and earnings volatility, focuses our U.S. operations on our areas of greatest strength and opportunity, and crystallizes future earnings and capital releases that will further support our growth and shareholder value creation.
"It also transfers this business to a financially strong buyer that understands and is committed to the annuity and life insurance sectors, which will benefit customers and the outstanding employees who will continue to support them."
Sun Life's statement didn't say how many of its employees would be affected by the deal, which is expected to close by the end of the second quarter 2013
However, it said the businesses being sold have employees in Wellesley, Mass., Lethbridge, Alta., and Waterford, Ireland.
Speaking on behalf of Delaware Life Holdings, Guggenheim Partners president Todd Boehly said: "Together with Sun Life Financial's employees, we look forward to maintaining a high level of customer service, strong capitalization and ratings, and to building on this impressive platform."
Sun Life executives have scheduled a conference call with analysts to begin at 8:30 a.m. Eastern time.
News from © The Canadian Press, 2012