In a statement issued last night, Standard Life said the distribution agreement is expected to more than treble Standard Life Investments’ assets under management distributed by Manulife within three years (H1 2014: £3.3bn), and "deepen its existing highly successful relationship with John Hancock", the US unit of Manulife.
The sale to Manulife comprises Standard Life’s Canadian long term savings and retirement, individual and group insurance and investment management businesses.
Manulife said in a separate statement that it intends to finance a portion of the purchase price for Standard Life’s Canadian operations through a combination of a public offering, a private placement and through internal resources and possible future debt and/or preferred share issues.
After the expected completion of the sale in the first quarter of 2015, subject to approval of Canadian regulators and Standard Life shareholders, the Boston office of Standard Life Investments will become a hub for its entire North American business, and a new dedicated office in Toronto will serve Standard Life Investments’ institutional clients locally.
Keith Skeoch, CEO Standard Life Investments, said the deal will create “new opportunities” and that “we will reciprocate by distributing their funds into the UK retail market. It will also deepen our distribution capability with John Hancock in the United States and strengthen our profit margin and therefore our ability to reinvest in our business.
“The collaboration is a natural extension of our existing strategy where we have established a range of global strategic partnerships and relationships,” he said.
Donald Guloien, president and chief executive of Manulife, said several months ago Standard Life had decided to explore the sale of its Canadian operations through a competitive process.
“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,” he said.
In its half year results, Standard Life reported last month that its Asia and emerging market business returned to profit in the first half of this year, with operating profit before tax up to £6m ($10m, €7.5m), compared with a loss of £1m in the first half of last year.
