(May 3 – 09:30 ET) – Sun Life Financial Services of Canada Inc. is buying Keyport Life Insurance Co. and Independent Financial Marketing Group from Liberty Financial Companies Inc. for C$2.6 billion.

Keyport is a Boston-based provider of fixed and variable annuities, which Sun Life says will complement both its product array and distribution capabilities. With approximately 300,000 outstanding annuity contracts, Keyport has US$19.0 billion in assets under management and it generated total annuity sales of US$2.7 billion in 2000.

Keyport’s variable annuity sales of US$718 million will bring Sun Life Financial’s pro forma variable annuity sales to US$4.6 billion and position the combined business as the tenth largest firm in the U.S. variable annuity business.

IFMG is a marketer annuities and mutual funds to small and mid-size banks. Based in Purchase, New York, IFMG provides more than 50 banks across the United States with marketing services to distribute these wealth management products. IFMG was ranked first in the sale of fixed and variable annuities
through banks in 1998 and 1999 by The Kehrer Report, and had sales of US$3.3 billion in 2000.

Sun Life Financial will finance the purchase price through a combination of existing cash resources and external financing, which may include as much as $500 million in equity. Excluding a one-time charge of US$65 million to be taken at closing, the acquisition is expected to immediately accrete to
earnings per share, with an increase of 15¢ to 20¢ in 2002.

The acquisition is expected to add more than a full percentage point to ROE by 2003. The deal, which is subject to approvals by U.S. and Canadian regulators as well as Liberty Financial’s shareholders, is expected to close in the third quarter.