Standard Life has sold its Canadian arm to The Manufacturers Life Insurance Company in a £2.2bn deal that will see insurer distribute Manulife investment products to the UK retail market.
The provider expects to return £1.75bn the shareholders following the deal, which is due to complete in Q1 2015.
Manufacturers Life Insurance is a subsidiary of Manulife, a Canada-based financial services company. Both Standard Life and Standard Life Investments have agreed distribution partnerships with Manulife as part of the deal.
It will see Manulife provide fund distribution to SLI through Canada, the US and Asia.
SLI says it expects to treble its fund distribution through Manulife over three years. At the end of the first half of 2014 it had £3.3bn in assets under administration through Manulife.
Standard Life says it will also distribute Manulife’s investment products into the UK retail market.
The deal is subject to approval from shareholders and the Canadian regulator.
SLI chief executive Keith Skeoch says: “The sale will create new opportunities at Standard Life Investments, as we enter into a global collaboration agreement with Manulife, who intend to distribute our funds into Canada, the United States and Asia’s retail markets.
“We will reciprocate by distributing their funds into the UK retail market. It will also deepen our distribution capability with John Hancock [a Manulife subsidiary] in the United States and strengthen our profit margin and therefore our ability to reinvest in our business.”