Great-West Lifeco Inc. announced late yesterday that its subsidiary, U.S.-based Great-West Life & Annuity Insurance Company, has signed a definitive agreement to sell its health care business, Great-West Healthcare, to a subsidiary of CIGNA Corp. for US$2.25 billion.

The deal is expected to close during the first half of 2008, subject to regulatory and certain other approvals.

“In the United States, Great-West Lifeco will now be entirely focused on broadening and expanding its financial services business,” stated Raymond McFeetors, president and CEO of Great-West Lifeco.

Great-West Healthcare provides a variety of medical, dental, vision, life and disability coverage to approximately 5,200 employer groups and 2.2 million members across the United States.

“We are committed to working with CIGNA to facilitate a smooth and efficient transition for Great-West Life & Annuity’s current U.S. group health care customers, distribution systems and employees,” McFeetors said.

Great-West Life & Annuity will receive US$1.5 billion in cash and will retain an estimated US$750 million representing the amount of equity invested in the business as at the anticipated closing date. After payment of taxes and write-offs associated with intangibles and certain other assets of the business, Great-West Lifeco will have approximately US$1.6 billion that will be used to repay bridge financing associated with the acquisition of Putnam Investments, LLC, which transaction was completed on Aug. 3, 2007.

Goldman, Sachs & Co. acted as Great-West Life & Annuity’s financial advisor for the transaction, and Dewey & LeBoeuf LLP acted as legal counsel.

Great-West Life & Annuity will continue to serve its more than 4 million financial services customers through its Great-West Retirement Services and Individual Markets business lines. These business units offer employer-sponsored defined contribution savings plans and services, business-owned life insurance products, and individual life insurance and annuity products.

Through acquisitions and organic growth, Great-West Life & Annuity’s assets under management in its Retirement Services and Individual Markets businesses have grown to US$127 billion at Sept. 30, 2007 from US$87 billion at year-end 2005. Great-West Lifeco assets under administration in the U.S., including those of Putnam, total US$336 billion.