News Column

Standard Life signs £2.2bn deal to sell Canadian arm

September 4, 2014


EDINBURGH-based insurer Standard Life last night announced it has clinched a C$4bn (2.2bn) deal to sell its Canadian operations to Torontobased insurer Manulife Financial. The sale will see Standard Life shareholders receive a 1.75bn windfall, or 73p per share, as part of the deal that also sees the two firms agree a collaboration agreement that will let Manulife distribute Standard Life Investments' products into Canada, the US and Asia.

"We're not leaving Canada," said Standard Life group chief executive David Nish in a call with journalists following the announcement. "We're just finding a new way of distributing our global investment products."

Standard Life will in turn distribute Manulife products in the UK as part of the agreement.

Nish said the remaining 450m raised from the sale will be added to general corporate purposes, funding the organic growth of the business. "It also gives us an opportunity to look at further investment opportunities," he said.

Manulife chief executive Donald Guloien said Standard Life decided several months ago to look at a sale of its Canadian operations, and Manulife was the successful bidder.

He predicted it would take one to two years to integrate Standard Life's Canadian assets.

"It was a very competitive process and it's a highly attractive property," Guloien said on a call following the announcement.

"We think it is a great match with our organisation for a whole variety of reasons... they've developed some very creative products that are a terrific complement to ours."

The deal, subject to the approval of regulators and Standard Life shareholders, is expected to close in the first quarter of 2015.

Standard Life last month reported an operating profit increase of 12 per cent to 339m during the six months to 30 June due to auto-enrolment in the UK pushing more workers to enrol on company pension schemes.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: City A.M. (UK)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters