NU Online News Service, Sept. 29, 2003, 5:27 p.m. EDT – Manulife Financial Corp., Toronto, says it will acquire John Hancock Financial Services Inc., Boston, through an $11 billion stock swap, creating a new corporate entity valued at almost $26 billion.
Manulife says the boards of directors of the two companies last night unanimously agreed to a merger, which would create the second largest life insurance company in total assets in North America after MetLife Inc., New York, and the second largest in terms of market capitalization after American Insurance Group Inc., New York.
At the end of 2002, Hancock was the 11th largest U.S. insurer in terms of assets.
Manulife officials expect the merger to close in the second quarter of 2004.
Under the agreement, holders of Hancock common stock would receive 1.1853 Manulife common shares for each Hancock share that they own, giving them the equivalent of $37.60 per share. Hancock’s shares closed at $34.30 Sept. 24, the day rumors of the acquisition began to circulate.
If the deal is completed, Manulife’s Dominic D’Alessandro will be president and chief executive officer of the combined entity, which will be based in Toronto.
Hancock’s David D’Alessandro will become chief operating officer of the combined company. In addition, he will assume the duties of president of Manulife 12 months after the transaction is complete.
David D’Alessandro will continue to be chairman of Hancock, directing the combined companies’ North American retail and group businesses out of Hancock’s current headquarters.
Dominic D’Alessandro and David D’Alessandro are not related, according to Hancock and Manulife.
Other deal provisions:
- Maritime Life, Hancock’s Canadian subsidiary in Halifax, Nova Scotia, will become part of Manulife’s Canadian operations.
- The John Hancock brand will remain in effect for products sold in the United States, and Manulife will keep its brand for products it sells in both the United States and Canada.
- Manulife says most of Hancock’s senior management will remain, while top executives of Manulife’s U.S. subsidiary, Manulife USA, will join the Hancock team.
Rumors of the planned acquisition broke Friday in the Boston Globe.
The Globe noted at the time that Hancock’s David D’Alessandro appeared to be inviting bids for his company after his company converted from a mutual life insurance company to public ownership in 2000.
Hancock was also recently in talks with executives of MetLife about possibly being acquired by that firm, the Globe reported.