4th Sep 2014 06:26
LONDON (Alliance News) - Standard Life PLC late Wednesday said it is selling its Canadian business for GBP2.2 billion in a deal that leaves the company expecting to return GBP1.75 billion to shareholders, while the remaining GBP450.0 million will be retained for general corporate purposes.
In a statement, the FTSE 100 long-term savings and investment business said it is selling its Canadian long-term savings and retirement, individual and group insurance business and Canadian investment management business to The Manufacturers Life Insurance Co, a subsidiary of Manulife Financial Corp for CAD4.0 billion at closing.
The sale is expected to generate a one-off gain of GBP1.2 billion for Standard Life.
Additionally, Standard Life's asset management business, Standard Life Investments, has entered into a global collaboration agreement with Manulife, through which Manulife will distribute Standard Life Investments' funds in Canada, the US and Asia.
After returning capital to shareholders through a B/C share scheme, giving shareholders based in the UK the options of receiving their proceeds as income or as capital, Standard Life said it intends to carry out a share consolidation, but didn't specify the ratio.
The disposal continues Standard Life's strategy of increasing its focus on the asset management business. It follows the company's acquisition of Ignis Asset Management Ltd from Phoenix Group Holdings PLC for GBP390 million earlier this year.
On Wednesday, Standard Life said the sale achieves a number of goals, including the reduction of its exposure to spread/risk income; and advancing the distribution and growth prospects of its investments arm through collaborating with Manulife.
"The sale, the capital return and Standard Life Investments' strengthened relationship with Manulife are consistent with the group?s simple business model: increasing assets, maximising revenue and lowering unit costs while optimising the balance sheet," Standard Life said in a statement.
Chief Executive David Nish said that Standard Life's Canadian operations, which reported a GBP88.0 million profit attributable to group shareholders in the first half of the financial year, are an attractive prospect to Manulife.
"We have transformed our Canadian operations into a business which has consistently delivered strong results, contributing to the overall success of the group," Nish said in a statement.
"As a result, the Canadian business is now a much more attractive proposition and the sale allows us to realise fully the value of the business for our shareholders," Nish added.
By Samuel Agini; [email protected]; @samuelagini
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