Sun Life Financial Inc. said Wednesday it is selling its life reinsurance business to Berkshire Hathaway Life Co. of Nebraska, noting that it is not a growth area for the company.
The sale price was not disclosed.
The deal represents a bet on reinsurance by Warren Buffett, Berkshire Hathaway's billionaire CEO.
Berkshire Hathaway did not immediately comment. The Omaha-based company is a conglomerate with holdings in multiple industries including clothing, furniture and insurance, including General Re, a reinsurance company, and Geico, which sells auto insurance.
Sun Life Financial said it expects the deal to close Dec. 31.
The Toronto company's reinsurance business, held by its subsidiary Sun Life Assurance Co. of Canada, has about 70 employees in offices in Canada, the U.S. and Ireland. The unit assumes risks from life reinsurers and has life insurance in force of about $110 billion ($113 billion Canadian).
"This transaction reflects Sun Life Financial's strategy to deploy capital to the parts of our business that can best achieve strong, sustainable growth," said Sun Life CEO Donald Stewart. "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."
New York-listed shares of Sun Life Financial fell 53 cents to $26.85 in afternoon trading.
Berkshire Hathaway's Class A stock declined $3,118 per share, or 2.5 percent, to $120,337.