Manulife, John Hancock merge global operations

Manulife Financial Corp. of Canada and John Hancock Financial Services Inc. has merged operations creating a Canadian $34.7 billion ($25.6 billion) financial institution. It will thus have a combined net income of C$2.2 billion ($1.4 billion).

In the Philippines, the officials of Manulife Philippines and John Hancock Life Insurance are still preparing a press statement as of press time. Both life insurers are among the leading foreign players in the country‚ life insurance industry.

"Our officials are still behind close doors discussing the implications of the merge of our parent companies," Ma. Patricia R. Yuseco, John Hancock Life assistant vice president said.

Dominic D’Alessandro of Manulife will be the president and chief executive officer of the new company while John Hancock’s David D’Alessandro will be the chief operating officer. David will be named president 12 months after the merger is completed. Incidentally, the two are not related.

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 fo $37.60, a premium of 18.5 percent, based on unaffected share prices as of Sept. 24. Manulife intends to invest up to C$3 billion for the repurchase of its common shares. Purchases will be made subject to market circumstances and applicable regulatory requirements.

The combination of John Hancock and Manulife’s Asian businesses in Hong Kong, Japan, China and the rest of 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 heads said that it would continue to compliment each other during the merger process. It will "build on our respective strengths as well as unlock new opportunities for earnings growth that would not exist but for this combination," it said in a statement.

It added that the benefits of the merger are: a 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 diverse and balanced earnings base, 54 percent of which came from life insurance business based on combined 2002 net income; consolidation of operations in the United States, Canada, and Asia with cost savings of C$350 million ($255 million) by end of three years.