Manulife Financial’s acquisition of Standard Life’s Canadian operations vaulted the insurer to second place up from third in terms of premium volume in Canada.When the transaction takes effect in the first quarter of 2015, Manulife will surpass Sun Life Financial, with a share of 18.4% (up from 16.4%), versus 17.6% for Sun Life. Great-West Lifeco remains the leader with a share of hovering at 24%.

In Quebec, the transaction will land Manulife a total share of 11.7% (up from 9.3%). Manulife will rank fifth in the province, but it is bearing down on its competitors. Desjardins Insurance reigns with a share of 17.6%, followed by Industrial Alliance, Insurance and Financial Services (17.1%), Sun Life Financial (13.1%) and Great-West Lifeco (12.1%). (Editor’s note: all market share figures are calculated based on the insurer’s financial results at December 31, 2013, as compiled by The Insurance and Investment Journal).

Donald Guloien, Manulife CEO, emphasized that making deeper inroads in Quebec is one of the key elements of this transaction.

Caisse de dépôt et de placement du Québec responded vigorously to this message: it doubled its holding in Manulife stock on the very day the transaction was announced. The Caisse plans to inject $500 million more into Manulife share capital. This brings the Caisse’s total interest in Manulife to $1 billion.

Manulife’s acquisition of Standard Life operations caused ripples of concern in the distribution network in both Quebec and the rest of Canada.

Charles Guay, president of Standard Life, tried to calm the waters in a message posted on the insurance website. “Manulife is a well-established and well-respected company with a long history in Canada. The culture and approach-to-market of our two organizations are very similar and complementary in many ways. This transaction will increase the range of solutions and services available to our customers across Canada, providing them with more choice and regional reach,” he says, promising a harmonious transition for Standard Life clients.

David Nish, CEO of Scotland-based Standard Life, explains that this sale will let his business and its shareholders realize the full value of their Canadian business. “This transaction provides our Group and its shareholders with significant strategic and financial benefits. It accelerates our growth and reduces capital-intensity, while delivering substantial value. Operating profits from the businesses we retain following the sale are substantially higher than the whole group reported in 2010,” he points out.

Nish adds that Standard Life transformed its Canadian operations into a business that has constantly delivered solid results. “As a result, the Canadian business is now a much more attractive proposition and the sale allows us to realize fully the value of the business for our shareholders,” he says.