Manulife Financial has entered into an agreement to purchase the Canadian-based operations of Standard Life for approximately $4 billion in cash.

Standard Life began to explore the possibility of selling its Canadian business through a competitive process several months ago, and on September 3 Manulife president and CEO Donald Guloien announced that his company was the successful bidder.

Manulife says that the transaction and its financing will not inhibit its ability to pay dividends and will, in fact, improve core earnings. After the first year, the insurer predicts that the transaction will add about 3¢ to annual earnings per share over each of the next three years and will also increase earnings capacity above its 2016 core earnings objective of $4 billion.

"One of the key reasons we were interested in this company is its people in Quebec: we want to increase our presence in the province and use the very talented employee base to grow and expand our business in Quebec, throughout Canada and indeed the world," said Mr. Guloien.