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Sun Life Faces Delay in Sale of Annuity Business

Initially, the deal Sun Life Financial (TSX:SLF) struck in December to sell its U.S. annuity portfolio and some life insurance products for $1.35 billion to Delaware Life Holdings, a Guggenheim Partners-owned company, was scheduled to be completed by Q2 of 2013.

While the proposed deal has been approved by some regulators, including the Financial Industry Regulatory Authority (FINRA), the New York Department of Financial Services (NYDFS) is continuing its review process, making it unlikely the transaction will be completed as originally planned, Sun Life announced today.

The unexpected delay involving the NYDFS comes as it reviews private investor groups as owners of annuity business, as is the case with Delaware Life Holding’s Guggenheim Partners. Though Sun Life expects the additional NYDFS review will cause delays, both parties to the deal are working with regulators in an effort to “close the transaction as soon as possible,” the company said.

Foolish Takeaway

Sun Life’s variable annuity business has been a pain for the company because of the declining interest rate environment in which we’ve been locked.  With that environment potentially beginning to crack, one wonders if secretly Sun Life wouldn’t be all that disappointed if this deal were to fall through.

Regardless of whether the deal goes through, Sun Life is well positioned to outperform in a rising rate environment.  To learn about 5 more Canadian companies that investors can expect to produce superior long-term returns just click here and we’ll send you our special FREE report “5 Companies to Replace Your Canadian Index Fund”.

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The original version of this post, authored by contributor Tim Brugger, originally appeared on

Fool contributor Tim Brugger has no position in any stocks mentioned.  The Motley Fool has no position in any stocks mentioned at this time

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