299 bloor call control.
Senior Member
Good news, the CEO is being promoted from within Manulife ranks...
Good to hear that they expected the CEO to move to Toronto.
Good to hear that they expected the CEO to move to Toronto.
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Manulife project rumour - Wet blanket?
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Redroom Studios
Senior Member
good find on this article and update!
Copper1212
New Member
It's still concerning that he's American and probably couldn't care less about moving the company to the US. He'd probably welcome it.
Ramako
Moderator
Apparently he went to U of T if that counts for anything.
Sir Novelty Fashion
Senior Member
So did I, and as far as I can tell, it doesn't.
299 bloor call control.
Senior Member
That being said though, it looks like the Board of Directors seems to prefer to keep the head office in Toronto. Furthermore the new CEO has been in Toronto for 28 years, more than half of his 51 years on this earth -- I'm sure he has some loyalties to the city.
Filip
Senior Member
I hope so, losing Manulife would be a giant blow to the corporate environment of Toronto. Alike to Montreal losing the majority of their head offices in the 70s...
Btw, that article has an error, Manulife is now the largest insurance company in North America.. I believe they just passed AIG recently.
TrickyRicky
Senior Member
Could very well happen re: move of headquarters, but unlikely. The fact that the CEO would be American and a foreigner does not actually mean anything. Infact if you look at the history of Canadian business, most of this nations most successful businesses and most nationalist CEO's were foreigners or foreign born. From mining to energy to finance, foreigners and particularly Americans built perhaps a majority of this countries major companies and industries. This is a said reflection on what it means to grow up Canadian.
DaninToronto
Active Member
I don't see a major corporation moving its headquarters every time its CEO changes nationality. Moves are expensive, and it makes little sense for Manulife to pack up and leave and have to rehire all new workers.
It depends on the company's size. Royal Bank buying Centura Bank is not a concern as Centura is really small in comparison to Royal. But Manulife bought a company close to its size with a head office to match that was based in Boston. Wouldn't be hard for the company to decide Boston should be HQ especially if the top executives all lived in Boston. Good to see this hasn't happened.
Filip
Senior Member
I was just gonna say, I'm willing to bet Manulife's operations out of Boston are at par or beyond Toronto's.
S
spaced
Guest
I'm waiting for an announcement on Manulife bidding on CIBC again. That may help cement Manulife in TO (and maybe a new headquarters).
Observer Walt
Senior Member
^ That could well happen, as CIBC has taken more of a battering than other banks in the sub-prime commercial paper fiasco. In addition, many people point out that the future of Canadian banks is in internationalizing. CIBC is well behind the other four of the big five banks in this regard, and a hook-up with Manulife would give an instant presence in the U.S. market.
Edward
Senior Member
The Fed's are not going to let the banks merge with each other or the insurance firms anytime soon so take CIBC off the list. But AIG could be very interesting.
http://www.globeinvestor.com/servlet/story/RTGAM.20080922.wrreguly22/GIStory/
BREAKING NEWS FROM THE GLOBE AND MAIL
Manulife in talks for AIG assets
Insurer among those circling U.S. giant; expected breakup offers risks and rewards
Eric Reguly
Monday, September 22, 2008
ROME — — Manulife Financial is among the global insurers poised to launch bids for parts of American International Group , the giant insurer that became a ward of the U.S. government when last week's financial crisis pushed it to the brink of collapse.
Manulife executives, led by CEO Dominic D'Alessandro, met with financial advisers late last week to consider ways to exploit AIG's probable breakup, sources said.
Buying all of AIG, or big parts of it, would propel Manulife to the top rank of the global financial services industry.
It could also severely damage the company if the hurricanes hitting Wall Street do not lose their fury.
Mr. D'Alessandro isn't talking about Manulife's plans and did not return e-mails seeking comment. Manulife spokeswoman Laurie Lupton declined to comment yesterday.
AIG, the world's biggest insurer, would have collapsed had the U.S. Federal Reserve not agreed to lend it up to $85-billion (U.S.) in exchange for 79.9 per cent of its equity, making its rescue a de facto nationalization. Analysts expect AIG to be sold, in whole or in part.
While other insurers, ranging from Germany's Munich Re to Australia's QBE Insurance, are also potential bidders for large chunks of AIG, Manulife is viewed by some as a more logical suitor.
The Toronto-based insurer is a strong player in a weak market.
Like other insurers and banks that escaped the worst of the credit crunch, the company is ready to feast on the remains of the companies consumed by their own excesses, analysts said.
In a note published last Wednesday, Citigroup insurance industry analyst Colin Devine called Manulife, Canada's largest insurer, "an ideal candidate to make an aggressive bid for AIG."
"We consider [Manulife] the only insurer in the world with sufficient balance sheet strength that would allow it to bid for all of AIG's U.S. and Asian life insurance businesses," Mr. Devine said in his report.
Manulife's share price - $35.15 on Friday - is only 24 per cent off its 52-week high, giving it a market value of $52-billion.
Its profits, balance sheet and investment portfolio are robust and its insurance subsidiaries are rated triple-A, Standard & Poor's top rating. It has $3-billion in excess capital and could borrow much more to finance a deal.
Mr. D'Alessandro, 62, is set to step down as CEO by next spring, and he is to be replaced by chief investment officer Don Guloien. With little more than half a year to go, Mr. D'Alessandro might be reluctant to plunge himself and his executives into yet another transformational deal. Nor could he do it without Mr. Guloien's approval. Whatever Mr. D'Alessandro starts, his successor will have to finish.
But Mr. D'Alessandro has always wanted to build a Canadian-based global champion, and prizes like AIG come along only once in a century.
AIG's share have gone from a high of $70.11 to about $4, giving the biggest name in the business a market value of a mere $10-billion. The insurer's Asian business would turn Manulife into a powerhouse in that part of the world. Manulife is already third among foreign insurers, measured by earnings contribution from Asia. AIG is first, with 70 per cent of its earnings from Asia.
Analysts say AIG's crown jewels are its Asian operations and the group pension business in the United States. The U.S. business would be doubly attractive to Manulife because of the synergy potential with John Hancock, the big U.S. insurer bought by Manulife in 2004 for about $11-billion.
AIG is certainly a target. Its loan from the Fed comes at a punitive interest rate - 8.5 percentage points above the London interbank offered rate (Libor). The expensive loan gives AIG a huge incentive to unload assets so it can pay back the money quickly. Even before last week's nightmare, AIG had announced its intention to sell International Lease Finance Corp., the largest aircraft leasing business.
Manulife could make a quick offer for the whole company, which would please the regulators.
The problem is that the toxin levels in AIG's portfolios are not known. Buying certain divisions would be far less risky for Manulife or any other bidder.
The risk that comes with buying divisions instead of the whole company is getting trapped in bidding wars with powerful foreign rivals eager to build their U.S. presence.
Buying parts of AIG would be very much in character for Mr. D'Alessandro, who turned Manulife into a perpetual motion machine. Under him, the company de-mutualized and joined the stock market in 1999. He was keen to have a takeover to build the company.
In 2002, he bought Zurich Life's Canadian arm and tried to buy CIBC, an effort that was stopped by John Manley, the finance minister at the time. A year later, he landed John Hancock. Businesses were collected across Asia.
Today, Manulife is the top insurer in Canada, the second-biggest in North America and the sixth-biggest in the world. Half of its earnings come from the United States, with the other half split between Asia and Canada.
Size doesn't guarantee success, as AIG found. But Manulife is no AIG. While it has been an aggressive purchaser of companies, it was careful not to pay too much. In 2003, for instance, it ended its pursuit of Canada Life when the bidding got too rich (Great-West Lifeco was the winner).
Crucially, it shied away from products that seemed too good to be true, like credit default swaps, or CDSs, which are insurance against defaults on assets linked to corporate debt and mortgage securities. AIG teetered when it was downgraded by S&P on Sept. 15 and was suddenly unable to come up with the collateral to back its swaps. That's when the Fed came charging to the rescue. Its collapse would have sent financial shockwaves around the planet.
© The Globe and Mail
http://www.globeinvestor.com/servlet/story/RTGAM.20080922.wrreguly22/GIStory/
BREAKING NEWS FROM THE GLOBE AND MAIL
Manulife in talks for AIG assets
Insurer among those circling U.S. giant; expected breakup offers risks and rewards
Eric Reguly
Monday, September 22, 2008
ROME — — Manulife Financial is among the global insurers poised to launch bids for parts of American International Group , the giant insurer that became a ward of the U.S. government when last week's financial crisis pushed it to the brink of collapse.
Manulife executives, led by CEO Dominic D'Alessandro, met with financial advisers late last week to consider ways to exploit AIG's probable breakup, sources said.
Buying all of AIG, or big parts of it, would propel Manulife to the top rank of the global financial services industry.
It could also severely damage the company if the hurricanes hitting Wall Street do not lose their fury.
Mr. D'Alessandro isn't talking about Manulife's plans and did not return e-mails seeking comment. Manulife spokeswoman Laurie Lupton declined to comment yesterday.
AIG, the world's biggest insurer, would have collapsed had the U.S. Federal Reserve not agreed to lend it up to $85-billion (U.S.) in exchange for 79.9 per cent of its equity, making its rescue a de facto nationalization. Analysts expect AIG to be sold, in whole or in part.
While other insurers, ranging from Germany's Munich Re to Australia's QBE Insurance, are also potential bidders for large chunks of AIG, Manulife is viewed by some as a more logical suitor.
The Toronto-based insurer is a strong player in a weak market.
Like other insurers and banks that escaped the worst of the credit crunch, the company is ready to feast on the remains of the companies consumed by their own excesses, analysts said.
In a note published last Wednesday, Citigroup insurance industry analyst Colin Devine called Manulife, Canada's largest insurer, "an ideal candidate to make an aggressive bid for AIG."
"We consider [Manulife] the only insurer in the world with sufficient balance sheet strength that would allow it to bid for all of AIG's U.S. and Asian life insurance businesses," Mr. Devine said in his report.
Manulife's share price - $35.15 on Friday - is only 24 per cent off its 52-week high, giving it a market value of $52-billion.
Its profits, balance sheet and investment portfolio are robust and its insurance subsidiaries are rated triple-A, Standard & Poor's top rating. It has $3-billion in excess capital and could borrow much more to finance a deal.
Mr. D'Alessandro, 62, is set to step down as CEO by next spring, and he is to be replaced by chief investment officer Don Guloien. With little more than half a year to go, Mr. D'Alessandro might be reluctant to plunge himself and his executives into yet another transformational deal. Nor could he do it without Mr. Guloien's approval. Whatever Mr. D'Alessandro starts, his successor will have to finish.
But Mr. D'Alessandro has always wanted to build a Canadian-based global champion, and prizes like AIG come along only once in a century.
AIG's share have gone from a high of $70.11 to about $4, giving the biggest name in the business a market value of a mere $10-billion. The insurer's Asian business would turn Manulife into a powerhouse in that part of the world. Manulife is already third among foreign insurers, measured by earnings contribution from Asia. AIG is first, with 70 per cent of its earnings from Asia.
Analysts say AIG's crown jewels are its Asian operations and the group pension business in the United States. The U.S. business would be doubly attractive to Manulife because of the synergy potential with John Hancock, the big U.S. insurer bought by Manulife in 2004 for about $11-billion.
AIG is certainly a target. Its loan from the Fed comes at a punitive interest rate - 8.5 percentage points above the London interbank offered rate (Libor). The expensive loan gives AIG a huge incentive to unload assets so it can pay back the money quickly. Even before last week's nightmare, AIG had announced its intention to sell International Lease Finance Corp., the largest aircraft leasing business.
Manulife could make a quick offer for the whole company, which would please the regulators.
The problem is that the toxin levels in AIG's portfolios are not known. Buying certain divisions would be far less risky for Manulife or any other bidder.
The risk that comes with buying divisions instead of the whole company is getting trapped in bidding wars with powerful foreign rivals eager to build their U.S. presence.
Buying parts of AIG would be very much in character for Mr. D'Alessandro, who turned Manulife into a perpetual motion machine. Under him, the company de-mutualized and joined the stock market in 1999. He was keen to have a takeover to build the company.
In 2002, he bought Zurich Life's Canadian arm and tried to buy CIBC, an effort that was stopped by John Manley, the finance minister at the time. A year later, he landed John Hancock. Businesses were collected across Asia.
Today, Manulife is the top insurer in Canada, the second-biggest in North America and the sixth-biggest in the world. Half of its earnings come from the United States, with the other half split between Asia and Canada.
Size doesn't guarantee success, as AIG found. But Manulife is no AIG. While it has been an aggressive purchaser of companies, it was careful not to pay too much. In 2003, for instance, it ended its pursuit of Canada Life when the bidding got too rich (Great-West Lifeco was the winner).
Crucially, it shied away from products that seemed too good to be true, like credit default swaps, or CDSs, which are insurance against defaults on assets linked to corporate debt and mortgage securities. AIG teetered when it was downgraded by S&P on Sept. 15 and was suddenly unable to come up with the collateral to back its swaps. That's when the Fed came charging to the rescue. Its collapse would have sent financial shockwaves around the planet.
© The Globe and Mail
CityPlaceN1
Senior Member
Manulife went from 1/2 of AIG's size by market cap to 5 times as large in a very short time. This could be very big news for Manulife and hence the city.