With a market capitalization of about $8 billion, Chattanooga, Tennessee-based Unum would have been the biggest sale of a public U.S. insurance company since 2004. The person declined to be identified because the talks were private.
“I think Sun Life knows they have to get bigger in the U.S.,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto, which manages about C$4 billion in assets including Sun Life shares. “It’s hard for me to think of any other natural avenues of growth.”
Sun Life, Canada’s third-largest insurer, said in November 2009 that it needed an acquisition in the U.S. life-insurance market to “significantly” expand its presence there, according to President Jon Boscia. Boscia announced in October that he was retiring from Toronto-based Sun Life in the first quarter of this year.
Sun Life received about a third of its revenue last year from the U.S., according to Bloomberg data. The insurer has more than 2,800 employees in the U.S. and owns Boston-based MFS Investment Management, the country’s oldest mutual fund.
Sun Life rose 20 cents to C$31.15 at the 4 p.m. close of trading on the Toronto Stock Exchange. Unum climbed 63 cents, or 2.4 percent, to $26.44 in New York Stock Exchange composite trading.
Jim Sabourin, a spokesman for Unum, and Frank Switzer, a spokesman for Sun Life, declined to comment.
The talks broke down in January, and Unum may still be open to approaches, according to the Wall Street Journal, which reported the discussions earlier today.