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IPO Watch: Manulife May Dangle John Hancock

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Canadian insurer Manulife Financial Corp. is exploring a possible initial public offering or spinoff of its Boston-based John Hancock Financial Services Inc. unit, the Wall Street Journal reported, citing people familiar with the plans. The planned move comes amid ongoing struggles for life insurers with low interest rates that dampen investment profits.

Toronto-based Manulife acquired John Hancock in 2004 for more than $10 billion to boost its US expansion. However, after years of disappointing returns from the U.S. unit, the Canadian insurer was said to be under pressure from some of its shareholders to sell John Hancock.

Manulife executives reportedly have discussed divesting some parts of John Hancock, including long-term care insurance. Last year, the unit decided to stop selling new individual long-term care policies, which help pay for home care or nursing home stays.

The unit also faced abrupt leadership changes recently. In May, Craig Bromley, who had been running John Hancock since 2012, left the firm, while Manulife appointed Michael Doughty to run John Hancock on an interim basis.

John Hancock acts as Manulife's US brand name. In its 2016 annual report, Manulife said it has about 6,700 US employees and its US division reported revenue of $15.5 billion for the year.

Representatives for Manulife and John Hancock reportedly said its against corporate policy to comment on market rumors or speculation.

by RTT Staff Writer

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