The business will be integrated with Sun Life’s UK operations, and will take on the Sun Life Financial of Canada brand.
The transaction, which is anticipated to be completed in the third quarter of 2009, is subject to regulatory approvals and to purchase price adjustments related to market and business performance.
Lincoln is one of main players in the UK variable annuity market. The Hartford pulled out of the market in May, following price increases from MetLife and Aegon.
Aegon recently announced plans to replace its 5 for Life product with a less generous guaranteed product due to the increased cost of securing the guarantees in the market.
Sun Life Financial chief executive officer Donald A. Stewart says: “Sun Life is seizing a compelling opportunity to expand the scale of its UK business by acquiring a highly complementary and sizable block of business.
“The combined operation is expected to generate attractive returns and serve to position Sun Life for future growth in one of the world’s largest life insurance markets.”
The acquisition will increase Sun Life UK’s assets under management by nearly 60 per cent to £10.6bn and double the number of policies in force to 1.1 million.
The two operations hold books of business in life insurance, pensions and annuities.
Sun Life says Lincoln’s business and distribution platform in the UK, including the firm’s relationships with IFAs, will give it more opportunity to sell additional products.
Lincoln UK sales and marketing director Helen Turner says: “The acquisition by Sun Life Financial Inc. will further strengthen our business and provide us with expanded opportunities.
“We will continue with the promotion of the i2Live product, Financial Foundations and Unit Trust range and will provide full Q&A and further briefings over the coming weeks and months as we start to make plans for when the acquisition is completed, anticipated to occur by the end of September this year.”