NU Online News Service, Oct. 23, 11:50 a.m. – Sun Life Financial Services of Canada Inc., Toronto, says it has agreed to sell Clarica Life Insurance Company’s Clarica U.S., Inc. subsidiary to Midland National Life Insurance Company, West Des Moines, Iowa, for $286 million in cash. The sale price includes repayment of some $48 million of existing Clarica U.S. debt, the company says.
The sale, which does not include Clarica’s U.S. reinsurance operations, is subject to approval from U.S. regulators, Sun Life notes. It expects the deal to close in the first quarter of 2003.
Sun Life Financial acquired Clarica on May 29, 2002.
“Although Clarica U.S. is a strong company, we concluded after a lengthy review process that there was not a clear strategic fit with Sun Life Financial’s existing U.S. operations,” explains Donald A. Stewart, chairman and chief executive officer of Sun Life Financial. “The sale of Clarica U.S. is consistent with our focus on businesses where we can maintain or achieve competitive scale or scope.”
As a result of this transaction, Sun Life Financial expects to take a charge to earnings of about $30 million in the fourth quarter of 2002.