(Bloomberg) — Sun Life Financial Inc., Canada's third- largest life insurer, agreed to buy an employee-benefits business from Assurant Inc. to expand in the U.S.
Assurant will receive $940 million in the sale, the New York-based company said in a statement Wednesday. Sun Life said in a separate statement that its net investment will be $975 million including capital required to support the operation.
Sun Life Chief Executive Officer Dean Connor is expanding beyond Canada as Assurant turns its focus to property-casualty coverage, including policies that protect consumer electronics and homes. Sun Life purchased Redmond, Washington-based asset manager Prime Advisors this year.
"The acquisition of the Assurant employee-benefits business is directly on strategy, accelerating the growth of our U.S. group-benefits business," Connor said in the statement.
Sun Life expects the deal to add 8 Canadian cents a share to 2016 earnings, rising to 17 cents a share by 2019, according to the statement, excluding transaction and integration costs. The transaction may be completed by the end of next year's first quarter, Sun Life said. The 1,700 employees at the Assurant unit will be offered positions with Toronto-based Sun Life, Assurant said in a statement.
The acquisition is the largest in more than a decade for Sun Life, which bought rival Clarica Life Insurance Co. in 2002 and two U.S.-based Liberty Financial units in 2001. Gaining Assurant's assets increases Sun Life's U.S group-benefits unit by 50 percent to about $4 billion in premiums.
