By Carolyn King
TORONTO-- Manulife Financial Corp. said Tuesday it has agreed to
acquire New York Life Insurance Co.'s retirement-plan services
business for an undisclosed amount, significantly bolstering its
retirement-plans business overall.
The Canadian insurance giant is making the purchase through its
U.S. unit, John Hancock Financial. As part of the deal, New York
Life has agreed to assume, on a reinsurance basis, 60% of certain
John Hancock life insurance policies, Manulife said in a
statement.
The deal follows Manulife's move to acquire Standard Life PLC's
Canadian operations earlier this year for about 4 billion Canadian
dollars ($3.4 billion). Like that deal, the New York Life asset
purchase underscores Manulife efforts to expand its
wealth-management business globally and increase its exposure to
lower-risk, shorter-duration products such as group benefit
insurance products and mutual funds.
Manulife said the combined businesses will comprise about $135
billion in plan assets under administration, increasing John
Hancock's assets by about $50 billion. The combined operations will
include 55,000 retirement plans and 2.5 million plan
participants.
The acquisition, which is expected to add modestly to Manulife's
core earnings per share in the medium term, positions John Hancock
well in a consolidating retirement-plan market, the company
added.
Separately, New York Life said the sale will allow it to focus
on life insurance and annuities, and third-party retail and
institutional asset management.
Manulife said the purchase of the New York Life assets is
expected to close in the first half of 2015, subject to regulatory
approvals and other customary conditions. The purchase of the
Standard Life Canadian assets is expected to close in the first
quarter.
"When completed, these transactions will each accelerate our
strategy to grow our wealth and asset management businesses around
the world," Chief Executive Donald Guloien said in the Manulife
statement.
Write to Carolyn King at carolyn.m.king@wsj.com
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