Canada Life takeover secures Irish jobs

THE future of Canada Life’s 900 Irish workers was secured yesterday when Great-West Lifeco Inc beat off Manulife to take over the company.

In a classic white knight manoeuvre Great-West Lifeco Inc trumped Manulife Financial Corp’s C$6.4 billion hostile bid for Canada Life. Great-West agreed to acquire Canada Life for about C$7.1 billion in cash, preferred stock and common stock.

More than 25,000 Irish shareholders in Canada Life have been advised by the company’s board to accept a C$44.50 per share offer for the company from Great-West Lifeco Inc.

If, as anticipated, the deal goes through, Irish shareholders will receive about €6,830 in cash, compared with the €6,140 on offer in a C$40 per share offer from Manulife.

Canada Life’s Irish MD Tom Barry said the deal secures the future of the 900 employees and tied agents employed by the company in Ireland.

“Ireland and the German operations run from here have been identified as an engine for growth in the years ahead and we plan to deliver on that,” he said.

Winnipeg-based Great-West, controlled through Power Corp by Montreal’s Desmarais family, is offering $44.50 a share for Canada Life, which has its headquarters in Toronto.

Canada Life’s board is recommending the insurers’ shareholders accept the deal.

Great-West president and chief executive Raymond McFeetors said: “As a result of this transaction, Great-West will emerge from the final stage of industry consolidation with a pre-eminent position in the Canadian life insurance industry and a significantly enhanced business in the United States.

“We are bringing together outstanding companies with high calibre people who are focused on high quality service.”

Mr McFeetors has already been in contact with Mr Barry at the company’s Irish headquarters to discuss the implications of the takeover deal.

Manulife already owns 9.1% of Canada Life, which would be worth $654-million if the company decides to throw in the towel and not contest Great-West’s offer.

The Great-West-Canada Life combination creates the largest life insurance company in Canada by revenue, profit and stock market value.