Manulife Financial Corporation and John Hancock Financial Services to Merge in Cdn$15 billion (US$11 billion) transaction

TORONTO, ON, and BOSTON, MA, Sept. 28, 2003 – Manulife Financial Corporation (TSX, NYSE: MFC) and John Hancock Financial Services, Inc. (NYSE: JHF) today announced that their Boards of Directors have each unanimously agreed to a tax-free, stock-for-stock merger of the companies, creating a leading global insurance franchise, valued at Cdn$34.7 billion (US$25.6 billion) based on closing stock prices on September 24, 2003, before rumours affected the stock of each company. The combined companies’ competitive strength will be marked by the diversity and depth of their products and distribution, a leading position in the marketplace across all of its core business lines and economies of scale.

Under the terms of the merger, John Hancock common shareholders will receive 1.1853 Manulife common shares for each John Hancock common share, representing a price of US$37.60, a premium of 18.5 per cent, based on unaffected share prices as of September 24, 2003. Manulife intends to invest up to Cdn$3 billion (US$2.2 billion) for the repurchase of its common shares. Purchases will be made subject to market circumstances and applicable regulatory requirements.

Manulife’s Dominic D’Alessandro will be President & Chief Executive Officer of the combined entity, which will have its global headquarters in Toronto, Canada.

Hancock’s David D’Alessandro will become Chief Operating Officer and future President of Manulife when the transaction is complete. (His appointment to President will take effect 12 months after the transaction closes.) He will report to Dominic D’Alessandro. Dominic D’Alessandro and David D’Alessandro are not related.

David D’Alessandro will remain Chairman & Chief Executive Officer of John Hancock Financial Services. In that capacity, he will direct the combined companies’ North American retail and group businesses, which will be headquartered in Boston, Massachusetts. John Hancock’s Canadian subsidiary Maritime Life, headquartered in Halifax, Canada, will become part of the integrated Canadian division of Manulife and part of the North American division.

The combined company will market products and services under multiple brands including John Hancock in the United States and Manulife in Canada and the United States.

“We see this as a unique strategic opportunity,” said Manulife’s Mr. D’Alessandro, “to combine two exceptionally strong companies into a single, integrated, global market leader whose scale and capital base will drive even greater growth and shareholder value. The benefits of this transaction are many, strengthening our position in each of our core businesses.

“The merger also enables us to create the largest life insurance company in Canada, and indeed, the second largest in North America. That is good news for those who believe it is important that we invest in the economic strength of our country, as we expect to maintain significant operations in our Canadian headquarters in Kitchener-Waterloo, as well as Halifax, Montreal, Toronto and the regional offices across the country,” he added.

“We believe this transaction is good for our shareholders, our employees and our community,” said Hancock’s Mr. D’Alessandro. “Not only is consolidation in our industry inevitable, but for companies of our size to compete and grow in the future, it is necessary. This transaction gives us the scale, capital base and diversity of product and distribution to grow as a business, as well as the ability for John Hancock to remain strong and rooted in the City of Boston.”

The combination of John Hancock’s Asian businesses with Manulife’s strong base in Hong Kong, China, Japan and Southeast Asia will expand the operations to 11 countries and territories, resulting in one of the most extensive life insurance franchises in all of Asia.

Both executives emphasized that Manulife and Hancock “complement each other in ways that build on our respective strengths as well as unlock new opportunities for earnings growth that would not exist but for this combination.” As a result of the combination, they said, the entity and its shareholders should benefit from:

  • Greatly enhanced scale across a diversified set of businesses;
  • A significantly expanded capital base;
  • Access to deeper and more diversified distribution capabilities;
  • A more diverse and competitive product line, and the ability to make each company’s best products available to all distributors;
  • Having several strong, high quality brands to market, including John Hancock, which will be the primary brand in the United States, and Manulife Financial, which will be the primary brand in Canada;
  • Increased capacity to grow profitable core business lines;
  • Stronger positions in all core business lines;
  • A more diversified and balanced earnings base, 54 per cent of which came from life insurance business based on combined 2002 net income;
  • Consolidation of operations in the United States, Canada and Asia with estimated cost savings of Cdn$350 million (US$255 million) by the end of three years.

The transaction is expected to be accretive to Manulife’s standalone net income by two per cent or Cdn$0.08 (US$0.06) per share, excluding one-time charges, for nine months of 2004, with accretion rising to eight per cent or Cdn$0.32 (US$0.23) a share in 2005.

As President & CEO, Dominic D’Alessandro will oversee all aspects of the combined company’s business from its global headquarters in Toronto, including investments, reinsurance, operations in Japan and Asia, and central corporate functions. David D’Alessandro will oversee integration of the two companies and lead its consolidated North American operations, which, based on 2002 earnings, would account for 67 per cent of the combined entity’s net income and encompass all insurance, annuity, group health, mutual fund, pension and 401(k) business lines in the United States and Canada.

Most of John Hancock’s senior executive team is expected to remain with the company. Manulife’s U.S. subsidiary, Manulife USA has a substantial presence in Boston and most of its senior executive team is expected to join the consolidated operation.

Manulife’s Executive Committee will consist of Dominic D’Alessandro and David D’Alessandro, along with Senior Executive Vice Presidents from Manulife and John Hancock Financial Services. Reporting to Dominic D’Alessandro will be Victor Apps, Donald Guloien, John Mather, Trevor Matthews and Peter Rubenovitch. Reporting to David D’Alessandro will be James Benson, Wayne Budd, John D. DesPrez III, Bruce Gordon and Tom Moloney.

The merger is subject to customary closing conditions, including receipt of required regulatory approvals and approval by John Hancock stockholders. Company officials expect that the merger will close in the second quarter of 2004.

At a glance

The combined entity would have:

  • A market capitalization of Cdn$34.7 billion (US$25.6 billion) based
    on unaffected share prices as of September 24, 2003;
  • Combined net income of Cdn$2.2 billion (US$1.4 billion) based on 2002 net income, 67 per cent of which came from the North American operation;
  • Assets under management of Cdn$333 billion (US$246 billion) as at June 30, 2003.

Calculation of Combined Financial Data

The statements of combined net income and assets under management in this release and the attached fact sheet are estimates and have been calculated by adding similar category information from the companies’ separate filings with the Securities Exchange Commission. Because Manulife uses Canadian GAAP and John Hancock uses U.S. GAAP, the calculation method described above may result in amounts that differ from amounts resulting from the application of either form of GAAP to the combined entity in the future.

About Manulife Financial

Manulife Financial is a leading Canadian-based financial services group operating in 15 countries and territories worldwide. Through its extensive network of employees, agents and distribution partners, Manulife Financial offers clients a diverse range of financial protection products and wealth management services. Funds under management by Manulife Financial were Cdn$144.3 billion as at June 30, 2003.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at

About John Hancock

John Hancock Financial Services, Inc. (NYSE: JHF) and its affiliated companies provide a broad array of insurance and investment products and services to retail and institutional customers. As of June 30, 2003, John Hancock and its subsidiaries had total assets under management of US$139.7 billion. John Hancock can be found on the Internet at