Canadian Underwriter

Clarica-Sun Life merger goes through despite protests

March 7, 2002   by Canadian Underwriter

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In the face of public defiance by some key shareholders, the mega-merger of lifecos Clarica and Sun Life was passed by Clarica shareholders yesterday. The deal creates Canada’s largest life insurer, with $398.8 billion in assets under management and combined revenue in 2001 of $23 billion.
Dissenters had objected to a break-up fee of $310 million, one of the largest in Canadian corporate history. The merger passed by a narrow 72% margin, with a two-thirds majority required.
The deal is reported to be worth almost $7 billion, and involves the exchange of approximately 1.5 Sun Life shares for each Clarica share.
“Shareholders recognized the strengths of this agreement and supported it in spite of opposing influence,” says Clarica chair David Ganong, whose board had recommended shareholder approval when it was announced last December.
The deal, the first since the implementation of new federal financial services laws allowing for such mergers, still requires regulatory approval. It is expected to close in the second quarter 2002.

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