Manulife Financial Corp. announced today that it will make an offer to acquire all the outstanding common shares of Canada Life Financial Corp. to create Canada’s largest insurance company in a transaction valued at more than $6.4 billion.

“Manulife is determined to be a global force in financial services,” said Manulife Financial president and CEO Dominic D’Alessandro, in a news release.

Under the terms of the offer, Canada Life common shareholders can choose to receive either $40 in cash or 1.055 Manulife common shares for each Canada Life common share, subject to pro-ration if the number of shares elected for cash exceeds 40%, or for shares exceeds 60%, of the total number of shares tendered to the offer.

Manulife’s offer represents a premium of 30% over the weighted average trading price of Canada Life’s shares on the Toronto Stock Exchange over the last 20 trading days.

The transaction will create the largest insurance company in Canada by market capitalization and create a new Canadian leader in key markets. The combined company’s market capitalization would make it the sixth largest corporation in Canada and the fourth largest life insurance company in North America. With significant operations in Canada, the United States, Asia and Europe, the combined company would be a major Canadian-based international competitor, broadly diversified geographically and well-positioned for further global expansion.

Manulife and Canada Life had combined premiums and deposits of $40.8 billion for the 12 months ended September 30, 2002. Total assets under administration of the two companies were $191.9 billion at September 30, 2002.

“Canada Life’s businesses are an excellent fit with our own and we intend to build the combined operations into a stronger company,” said D’Alessandro.

In Canada, the combined company would rank first in individual life insurance sales, first in individual fixed annuity sales, first in group health sales, second in group pension contributions and second in group life sales.

In the United States, the combined company would be first among insurance companies for volume of new 401(k) defined contribution pension plans sold, fifth in universal life insurance sales, and eleventh in individual variable annuity sales.

In Asia, it would rank second in Hong Kong individual life insurance and pension fund markets, second among foreign life insurers in China and Vietnam, and as the fourth largest insurer in Indonesia and the Philippines.

In Europe, it would be first in group life insurance and second in group income protection in the United Kingdom, and would have strong, targeted wealth management and insurance operations in the United Kingdom, Ireland and Germany.

Manulife and its affiliates currently own 14.7 million Canada Life common shares, or approximately 9.1% of the outstanding Canada Life common shares.

Manulife has engaged Scotia Capital Inc. as its lead financial advisor in connection with this transaction.