Sun Life Financial Inc. announced Aug. 4 that it has entered into an agreement to sell SLF of Canada UK Limited (Sun Life UK) to London-based Phoenix Group Holdings plc.
Sun Life UK manages life and pension policies and annuity blocks for UK Clients. The company is closed to new sales and has been operating as a run-off business in the life and pension policies segment since 2001, says the company.
Sun Life will sell Sun Life UK to Phoenix Group for a closing price of £248 million (approximately C$385 million) and will retain its economic interest in UK's payout annuities business, says the company.
As part of the sale, Sun Life will form a long-term partnership to become a strategic asset management partner to Phoenix Group. Sun Life's asset management companies, MFS and SLC Management, will continue to manage approximately C$9 billion of Sun Life UK's general account upon the close of the sale, says the company.
“Phoenix Group has set a goal to invest approximately US$25 billion in North American public and private fixed income and alternative investments over the next five years. MFS and SLC Management will be material partners to Phoenix Group in achieving this goal,” says Sun Life.
"We're excited to partner with Phoenix Group. A great deal of consideration was taken to find the right buyer and partner for our UK business. Phoenix Group is a purpose-led company with similar values to Sun Life and a strong focus on delivering outcomes for their customers. We're also pleased about our asset management partnership, which will bring the strength of MFS and SLC Management to Phoenix Group customers," stated Kevin Strain, President and CEO of Sun Life.
He added that the sale of the Sun Life UK business “is consistent with our strategy to grow fee-based and capital light businesses. It also frees up capital to continue on our journey of creating long-term value for our shareholders. This transaction also aligns with our objective to continue building our Sun Life asset management pillar by creating an attractive long-term partnership with the UK's leading long-term savings and retirement business."
The transaction is expected to close during the first half of 2023.
