Sun Life to Acquire Liberty Financial Unit

Sun Life Financial Services of Canada Inc. agreed to acquire Liberty Financial Cos.’ Keyport Life annuity business for about $1.7 billion, expanding its foothold in the U.S. financial services market, sources said. The transaction was approved by both companies’ boards and is expected to be announced early today, sources said. The deal is part of an auction started by Boston-based Liberty Financial, which first announced plans to sell its operations in November. Liberty Financial will retain its asset management business, including the Stein Roe & Farnham mutual funds, for now, sources said. Sun Life already has a U.S. life insurance business and owns Boston-based MFS Investment Management, which it said ranks as the No. 9 U.S. mutual fund firm. With the acquisition of Keyport Life, Sun Life will gain nearly 300,000 policyholders and more than $17 billion in assets, giving it an even stronger presence in the U.S. life insurance market. A Liberty Financial spokesman declined to comment. Sun Life Financial spokesman John Vincic also declined to comment. On the NYSE, Liberty shares rose 7 cents to close at $42.03 and Sun Life rose 64 cents to close at $20.07.

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