TORONTO — Sun Life Financial Inc. (TSX: SLF) says it has a deal to buy the employee benefits business of Assurant Inc. (NYSE: AIZ) for US$975 million.
The Toronto-based insurer and financial services company says the deal will create the sixth-largest group benefits business in the United States with one of the broadest product portfolios in the industry.
Among other things, the company says the transaction will add "significant new capabilities" that include a strong dental business as well as a successful group life and disability business.
As such, it will grow Sun Life's U.S. group benefits business in-force by more than 50 per cent to about US$4 billion, while strengthening partnerships with brokers and private exchanges and supporting investments in technology and distribution.
Upon closing, expected in the first quarter of next year, Sun Life Financial U.S. will provide protection through approximately 64,000 employers in small, medium and large workplaces in the United States.
The combined U.S. group benefits business will operate in multiple sites, including Sun Life Financial's U.S. headquarters in Wellesley, Mass., and Assurant employee benefits' main office in Kansas City, Mo.
"The acquisition of the Assurant employee benefits business is directly on strategy, accelerating the growth of our U.S. group benefits business and expanding the scope of our benefits business in North America," president and CEO Dean said in a statement announcing the deal.
Sun Life said the acquisition will be effected through reinsurance agreements, asset transfers and the direct purchase of certain legal entities.
Excluding transaction and integration costs, it is expected to immediately add to earnings.
The Canadian Press