Canada's Sun Life Financial has acquired US annuity provider Keyport Life Insurance and Independent Financial Marketing Group (IFMG) from Liberty Financial in a deal worth C$2.6bn (£1.18bn).
The deal, subject to approval from US and Canadian regulators as well as Liberty’s shareholders, is expected to close in the third quarter of this year. Sun Life will finance the deal using a combination of existing cash resources and external financing, which may include C$500m (£226.7m) in equity.
Keyport, based in Boston, is a provider of fixed and variable annuities. Currently, Keyport has approximately 300,000 outstanding annuity contracts, with C$29.5bn (£13.7bn) in assets under management and total annuity sales of C$4.2bn (£1.9bn) in 2000. The acquisition of Keyport will bring Sun Life's variable annuity sales to C$7.0bn (£3.17bn), leaving the combined business as the tenth largest in the US variable annuity business.
Under the terms of the deal, Sun Life will also acquire IFMG. Based in Purchase, New York, IFMG markets annuities and mutual funds to small and mid-size banks. At the moment, IFMG provides more than 50 banks across the US with marketing services to distribute these financial products.
By Geoffrey Ho
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