CHATTANOOGA, Tenn. (Bloomberg)—Unum Group, the largest U.S. disability insurer, recently weighed a sale to Canada’s Sun Life Financial Inc. before talks broke down, said a person with knowledge of the matter.
With a market capitalization of about $8 billion, Chattanooga, Tenn.-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. “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. Mr. Boscia announced in October that he was retiring from Toronto-based Sun Life in the first quarter of this year.
Sun Life received about one-third of its revenue last year from the United States, 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.
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 Tuesday.
Copyright 2011 Bloomberg
