Sun Life Financial agreed to sell a U.S. annuity business in a $1.35 billion deal to a firm owned by Guggenheim Partners shareholders to cut risks in equity markets and interest rates.
Guggenheim will provide investment management for the acquired businesses, including some life insurance assets, Sun Life said Monday in a statement. The business will be renamed Delaware Life Insurance.
Guggenheim Partners, run by CEO Mark Walter, has expanded from a family office with a handful of employees into a $160 billion global money manager through deals including the acquisitions of Claymore Group and Rydex ETF owner Security Benefit Corp. Talks to buy parts of Deutsche Bank’s money management business fell apart earlier this year.
Mr. Walter, who shot to prominence as the man behind the $2.15 billion purchase of the Los Angeles Dodgers, has hired investing veterans including Henry Silverman, the former chief operating officer of Apollo Global Management, to advise on expansion.
The sale represents a “transformational change” for Sun Life, reducing the company’s risk, President and CEO Dean Connor said Monday in the statement.
The sale will reduce earnings by about 22 cents a share in 2013, the insurer said. Sun Life, Canada’s third-largest insurer, will continue to operate in the U.S. through its employee benefits and voluntary benefits businesses, as well as through money manager MFS.
Morgan Stanley was the financial adviser to Sun Life. Debevoise & Plimpton provided legal counsel.