WINNIPEG, MB, May 11, 2006 – Great-West Lifeco Inc. today announced that its wholly-owned United Kingdom subsidiary, Canada Life Limited (Canada Life), has reached an agreement with The Equitable Life Assurance Society (Equitable Life) in the UK to acquire the assets and liabilities associated with most of Equitable’s not-for-profit pension annuity business.
The transaction involves the acquisition of approximately 130,000 policies, having liabilities and supporting assets with an approximate value at December 31, 2005 of $9.3 billion (pounds sterling 4.6 billion). The transaction is subject to regulatory and court approvals. Canada Life will acquire these liabilities effective January 1, 2006 by way of indemnity reinsurance. Following closing, expected in the first quarter of 2007, the liabilities and assets will be transferred to Canada Life. The actual values will depend on the asset values at the date of closing. The transaction is expected to be accretive to Lifeco earnings in 2006 and subsequent years.
“We believe this transaction represents the largest acquisition of a not-for-profit annuity portfolio in the UK,” said Raymond L. McFeetors, President and Chief Executive Officer of Lifeco. It is Canada Life’s second such transaction in the past year. Canada Life has established expertise in the UK annuity market, and already serves more than 150,000 annuitants.
“This transaction represents a major strategic step in the continued expansion of Canada Life’s presence in the UK, and will enable Canada Life to benefit from greater economies of scale in a growing market,” McFeetors said. “Moreover, the transaction advances our strategy to capitalize on the company’s position in core European markets.”
About Great-West Lifeco Inc.
Great-West Lifeco Inc. (TSX:GWO) is a financial services holding company with interests in the life insurance, health insurance, retirement savings, and reinsurance businesses. Lifeco has operations in Canada, the United States and Europe through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company and Great-West Life & Annuity Insurance Company. Lifeco and its companies have $182 billion in assets under administration. Great-West Lifeco is a member of the Power Financial Corporation group of companies.