Standard Life has announced the sale of its Canadian business to Manulife Financial in a deal worth $3.7 billion (£2.2 billion).
The transaction will include the company's long term savings and retirement, individual and group insurance and investment management businesses. The move sparked a spike in Standard Life shares jumped ten per cent to the equivalent of 73p a share. It will return £1.75 billion of the proceeds of the Manulife Financial deal to shareholders once the transaction is complete in 2015.
In August, Standard Life recorded a 12 per cent rise in its first-half operating profits following an increase in demand for its auto enrolment pensions. The Edinburgh-based group had gained 1,018 new auto enrolment corporate schemes with 180,000 people joining the system over the course of the year.
Standard Life's decision to sell its Canadian business will now see its products distributed through the US and Asia in addition to Canada as part of the deal. It is aiming to increase shareholder dividend once the deal is completed and it is already eyeing "new opportunities" across the world.
Keith Skeoch, chief executive officer of Standard Life Investments, spoke of his delight at being able to secure the deal with Manulife: "The collaboration is a natural extension of our existing strategy where we have established a range of global strategic partnerships and relationships.
“We look forward to working with Manulife and delivering our key priorities: the continuity of investment performance and commitment to client service and relationship management.”
Manulife is one of the leading financial services companies in Canada operating in Asia and the US as well as its home country. Boasting an international network of over 84,000 employees and agents the firm has been looking to branch out into the UK and it hopes that the agreement with Standard Life will allow it to do so.
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