UPDATE 2-Manulife to buy Standard Life's Canadian assets for $3.7 bln
(Adds comments from Standard Life CEO, analyst, further details)
By Euan Rocha and Jeffrey Hodgson
TORONTO, Sept 3 (Reuters) - Manulife Financial Corp said on Wednesday it has agreed to acquire the Canadian operations of Standard Life Plc for about C$4 billion ($3.7 billion) in cash, in a deal that significantly expands the insurer's presence in Quebec.
The Toronto-based insurer, already Canada's largest, said the transaction will boost earnings after the first year and more than double its presence in the largely French-speaking Canadian province, where it has long been under-represented.
The companies said they will also expand an existing wealth and asset management partnership, with Manulife distributing Standard Life funds in Canada, the United States and Asia, and Standard Life doing the same in the UK retail market.
"I think this is a good deal for Manulife," said Morningstar analyst Vincent Lui, noting that Standard Life is a pioneer in areas like liability driven investments and Manulife can benefit from the know-how it gets via the acquisition.
Lui also noted that the access and growth opportunities in Quebec were a huge bonus.
"Quebec is a market that has been to an extent ignored by a lot of the large Canadian insurers, so this deal gives Manulife a quick strategic entry point into that market," he said.
The deal, subject to the approval of regulators and Standard Life shareholders, is expected to close in the first quarter of 2015. Continued...