WINNIPEG — Great-West Lifeco Inc. says it is selling its Canadian subsidiary GLC Asset Management Group Ltd. to Mackenzie Financial Corp. for $175 million in cash.
As part of the deal, Great-West subsidiary The Canada Life Assurance Company will acquire fund management contracts relating to the private label Quadrus Group of Funds and other Canada Life branded investment funds from Mackenzie for $30 million in cash.
That will result in Lifeco receiving net cash of $145 million if the deal receives regulatory approval and closes as expected in the fourth quarter.
Canada Life says the fund management company it is establishing, Canada Life Investment Management Ltd. (CLIML), which is expected to commence operations in the fourth quarter, will assume fund management responsibilities for the investment funds in 2021.
In a separate release, Mackenzie says the addition of $36 billion in assets under management through the deal increases its total to $172 billion, making it one of Canada's largest asset managers.
Paul Mahon, CEO of Great-West Lifeco, says the transaction supports Canada Life's strategy to strengthen and grow its Canadian wealth management business.
"It leverages an already established and strong working relationship between our companies," he said in a statement.
"By working together, we will have access to Mackenzie's at-scale investment management capability, while retaining control of our overall Canadian wealth management strategy, including our product shelf and solutions for our customers."
This report by The Canadian Press was first published Aug. 4, 2020.
Companies in this story: (TSX:GWO)
The Canadian Press