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TORONTO (Reuters)—Canadian insurer Sun Life Financial Inc. on Wednesday said it would sell its reinsurance business to Warren Buffett's Berkshire Hathaway Inc. after months of looking for a buyer for the profitable unit.
Sun Life did not disclose sale terms for the business, which has 70 employees in offices in the United States, Canada and Ireland. A spokesman said the sale was not material financially to the company. He added Berkshire did not intend to keep the unit's Ireland office open but would take the rest.
The operation, which provides retrocessional coverage to life reinsurers, has in-force life insurance of $113 billion Canadian ($109.4 billion).
The deal is expected to close Dec. 31. Sun Life said the sale will boost its minimum continuing capital and surplus requirement ratio, a Canadian metric of capital adequacy, by 10 to 14 percentage points. The ratio was 210% on June 30.
"Our reinsurance business is profitable, but it is not a growth area for Sun Life Financial and this transaction releases capital which can be put to work in other businesses," Sun Life CEO Donald Stewart said in a statement.