Readers are referred to the section "Forward-Looking Statements"
at the end of this release. All figures are expressed in Canadian
dollars.
- Power continues to simplify corporate
structure
- Power Corporation sells its 13.9% interest in ChinaAMC to
IGM Financial
- Transaction to be partially funded through sale by IGM of
common shares of Great-West Lifeco to Power
Corporation
- Further opportunity to support Power share buyback
program
MONTRÉAL, Jan. 5, 2022 /CNW
Telbec/ - Power Corporation of Canada (Power Corporation or Power) (TSX: POW)
today announced that it has entered into an agreement under which
the Power Corporation group of companies' current combined 27.8%
equity ownership stake in China
Asset Management Co., Ltd. (ChinaAMC) will be consolidated at IGM
Financial Inc. (IGM) (TSX: IGM). Under the agreement, Power will
sell its 13.9% ownership stake to Mackenzie Financial Corporation,
a wholly owned subsidiary of IGM, for aggregate consideration of
$1.15 billion in cash. Power
shareholders will continue to participate in ChinaAMC through
Power's 64.3% economic interest in IGM.
To partially fund the transaction, IGM has agreed to sell
15,200,662 Great-West Lifeco Inc. (Great-West Lifeco) (TSX:
GWO) common shares to a subsidiary of Power Financial Corporation
(Power Financial or PFC), for aggregate consideration of
$575 million, representing a price of $37.83 per share which is equivalent to the
5-day volume-weighted average price of the Great-West Lifeco common
shares as at the close of business on January 5, 2022 (the Great-West Lifeco Share
Transfer).
"We continue to execute on our strategy to simplify and
streamline Power and to deliver value for our shareholders," said
R. Jeffrey Orr,
President and Chief Executive Officer of Power Corporation. "We
look forward to continued participation in ChinaAMC through our
ownership of IGM. We also believe this is an attractive opportunity
to both increase our ownership in Great-West Lifeco and support our
share buyback initiatives."
Power Corporation expects to return a portion of the net cash
proceeds from the transaction to its shareholders, after factoring
in the purchase of Great-West Lifeco common shares, through share
repurchases over time pursuant to a normal course issuer bid of
Power. The transaction is expected to be accretive to Power's net
asset value.
Timing and Regulatory Approvals
The sale of Power's interest in ChinaAMC will be subject to,
among other things, approval by the China Securities Regulatory
Commission and by certain other Chinese regulatory authorities.
The acquisition by Power of the Great-West Lifeco common shares
is conditional on the closing of the sale of the ChinaAMC
shares.
The transactions are expected to close in the first half of
2022.
Advisors
BMO Capital Markets and Morgan Stanley are acting as financial
advisors to Power. Blake, Cassels & Graydon LLP, and Baker
McKenzie are acting as Power's legal advisors.
Early Warning Disclosure
PFC currently beneficially owns, including through its
controlling interest in IGM, an aggregate of 657,587,165 Great-West
Lifeco common shares, representing approximately 70.7% of the
issued and outstanding Great-West Lifeco common shares (69.1% on an
economic basis). Excluding Great-West Lifeco common shares
beneficially owned by IGM, PFC currently owns 620,250,032
Great-West Lifeco common shares, representing approximately 66.7%
of the issued and outstanding Great-West Lifeco common shares.
On closing of the Great-West Lifeco Share Transfer, PFC will
indirectly acquire 15,200,662 additional Great-West Lifeco common
shares (representing approximately 1.6% of the issued and
outstanding Great-West Lifeco common shares) such that PFC will
beneficially own an aggregate of 635,450,694 Great-West Lifeco
common shares, excluding those beneficially owned by IGM,
representing 68.3% of the issued and outstanding Great-West
Lifeco common shares. The Great-West Lifeco Share Transfer will not
impact the aggregate beneficial ownership of Great-West Lifeco
common shares by PFC, which shall remain at 70.7% of the issued and
outstanding Great-West Lifeco common shares (including indirect
beneficial ownership through its controlling interest in IGM).
PFC's economic interest will increase to 69.8%. PFC and its
subsidiaries will continue to own, in the aggregate, voting
securities representing approximately 65% of the votes attached to
all voting securities of Great-West Lifeco.
PFC holds the Great-West Lifeco common shares for investment
purposes and, in accordance with applicable securities laws, may
increase or decrease its investment in Great-West Lifeco depending
on market conditions and then relevant factors. PFC relies on Part
5 of National Instrument 62-103 in respect of aggregation relief
relating to any securities that may be held by Great-West Lifeco
and its subsidiaries, IGM and its subsidiaries, and any investment
fund managed by entities within the Power Corporation group of
companies.
About Power Corporation
Power Corporation is an international management and holding
company that focuses on financial services in North
America, Europe and Asia. Its core holdings are
leading insurance, retirement, wealth management and investment
businesses, including a portfolio of alternative asset investment
platforms. To learn more, visit www.PowerCorporation.com.
Power Financial, a wholly owned subsidiary of Power Corporation
of Canada, is an international
management and holding company with interests in financial services
and asset management businesses in Canada, the United
States and Europe. It also
has significant holdings in a portfolio of global companies based
in Europe. PFC is continued under
the Canada Business Corporations Act and its head office is
located at 751 Victoria Square, Montréal, Quebec H2Y 2J3. To learn more, visit
www.PowerFinancial.com.
About China Asset Management Co., Ltd
Founded in 1998 as one of the first fund management companies in
China, China Asset Management Co.,
Ltd. (ChinaAMC) has maintained a market leading position in
China's asset management industry
with total AUM of approximately RMB¥1.607 trillion ($309 billion) at June 30,
2021. The company currently serves over 75,000 institutional
clients and 184 million retail investors. ChinaAMC boasts one of
the industry's strongest investment teams with over 250 dedicated
investment professionals. CITIC Securities is the largest
shareholder of ChinaAMC. To learn more, visit
fund.chinaamc.com for more information.
About IGM Financial Inc.
IGM Financial Inc. is one of Canada's leading diversified wealth and asset
management companies with approximately $270
billion in total assets under management and advisement at
November 30, 2021. The company
provides a broad range of financial planning and investment
management services to help more than two million Canadians meet
their financial goals. Its activities are carried out principally
through IG Wealth Management, Mackenzie Investments and Investment
Planning Counsel. To learn more, visit
www.igmfinancial.com.
About Great-West Lifeco Inc.
Great-West Lifeco Inc. is an international financial services
holding company with interests in life insurance, health insurance,
retirement and investment services, asset management and
reinsurance businesses. It operates in Canada, the United
States and Europe under the
brands Canada Life, Empower Retirement, Putnam Investments, and
Irish Life. To learn more,
visit www.greatwestlifeco.com.
Forward-Looking Statements
Certain statements in this news release, other than statements
of historical fact, are forward-looking statements based on certain
assumptions and reflect Power's and PFC's current expectations, or
with respect to disclosure regarding Power's and PFC's public
subsidiaries, reflects such subsidiaries' disclosed current
expectations as disclosed in their respective MD&A.
Forward-looking statements are provided for the purposes of
assisting the reader in understanding the Power's and PFC's
financial performance, financial position and cash flows as at and
for the periods ended on certain dates and to present information
about management's current expectations and plans relating to the
future and the reader is cautioned that such statements may not be
appropriate for other purposes. These statements include, without
limitation, statements regarding the anticipated benefits of the
disposition of Power's equity ownership stake in ChinaAMC and the
Great-West Lifeco Share Transfer, the timing of the completion of
the disposition of Power's equity ownership stake in ChinaAMC and
the Great-West Lifeco Share Transfer, the timing for the receipt of
the required regulatory and other approvals, the interest of PFC in
Great-West Lifeco following the Great-West Lifeco Share Transfer,
repurchases pursuant to a normal course issuer bid of Power, and
the effect of the disposition of Power's equity ownership stake in
ChinaAMC and the Great-West Lifeco Share Transfer on Power's
and PFC's future operations, financial conditions and share price
performance. Forward-looking statements include statements
that are predictive in nature, depend upon or refer to future
events or conditions, or include words such as "expects",
"anticipates", "plans", "believes", "estimates", "seeks",
"intends", "targets", "projects", "forecasts" or negative versions
thereof and other similar expressions, or future or conditional
verbs such as "may", "will", "should", "would" and "could".
By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved. A variety of factors, many of
which are beyond Power's and PFC's and their respective
subsidiaries' control, affect the operations, performance and
results of Power and PFC and their respective subsidiaries and
their businesses, and could cause actual results to differ
materially from current expectations of estimated or anticipated
events or results. These factors include, but are not limited to:
the impact or unanticipated impact of general economic, political
and market factors in North
America and internationally, fluctuations in interest rates,
inflation and foreign exchange rates, monetary policies, business
investment and the health of local and global equity and capital
markets, management of market liquidity and funding risks, risks
related to investments in private companies and illiquid
securities, risks associated with financial instruments, changes in
accounting policies and methods used to report financial condition
(including uncertainties associated with significant judgments,
estimates and assumptions), the effect of applying future
accounting changes, business competition, operational and
reputational risks, technological changes, cybersecurity risks,
changes in government regulation and legislation, changes in tax
laws, unexpected judicial or regulatory proceedings, catastrophic
events, man-made disasters, terrorist attacks, wars and other
conflicts, or an outbreak of a public health pandemic or other
public health crises (such as COVID-19), Power's and PFC's and
their respective subsidiaries' ability to complete strategic
transactions, integrate acquisitions and implement other growth
strategies, the disposition of Power's equity ownership stake in
ChinaAMC and the Great-West Lifeco Share Transfer not
occurring as expected, including failure of any condition to the
disposition of Power's equity ownership stake in ChinaAMC and the
Great-West Lifeco Share Transfer, or the failure to achieve the
anticipated benefits of the disposition of Power's equity ownership
stake in ChinaAMC and the Great-West Lifeco Share Transfer and
Power's or PFC's and their respective subsidiaries' success in
anticipating and managing the foregoing factors.
The reader is cautioned to consider these and other factors,
uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements. Information contained in
forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including management's perceptions of
historical trends, current conditions and expected future
developments, that the required approvals for the disposition of
Power's equity ownership stake in ChinaAMC will be received, as
well as other considerations that are believed to be appropriate in
the circumstances, including the availability of cash to complete
purchases under normal course issuer bid, and that the list of
factors in the preceding paragraph, collectively, are not expected
to have a material impact on Power or PFC and their respective
subsidiaries. While each of Power and PFC consider these
assumptions to be reasonable based on information currently
available to management, they may prove to be incorrect.
Other than as specifically required by applicable Canadian law,
each of Power and PFC undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which such statement is made, or to reflect the
occurrence of unanticipated events, whether as a result of new
information, future events or results, or otherwise.
Additional information about the risks and uncertainties of
Power's and PFC's business and material factors or assumptions on
which information contained in forward-looking statements is based
is provided in their disclosure materials, including each of Power
Corporation's most recent Management's Discussion and Analysis and
Annual Information Form, filed with the securities regulatory
authorities in Canada available at
www.sedar.com.
Non-IFRS Financial Measures and Presentation
This press release presents and discusses a financial measure
which is not in accordance with International Financial Reporting
Standards (IFRS). Net Asset Value presents the fair value of the
net assets of Power, expressed on a per share basis. Net Asset
Value presents the fair value of the net assets of Power and is
used to assist in assessing value, on a per share basis. This
non-IFRS financial measure does not have a standard meaning and may
not be comparable to similar measures used by other entities.
Reconciliations of the Net Asset Value and the non-IFRS basis of
presentation with the presentation reported in accordance with IFRS
are included in Power's most recent Management's Discussion and
Analysis.
SOURCE Power Corporation of Canada