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Canadian Insurer Buys Top 20 Commercial Mortgage Servicer in U.S.

Boston-John Hancock Financial Services, the parent of John Hancock Real Estate Investment Group, is being acquired by Manulife Financial Corp. of Canada in an $11 billion transaction (Canadian $15 billion).

The group is a major commercial mortgage servicer, with a portfolio of $9.84 billion in total named servicing volume as of midyear, according to a Mortgage Bankers Association survey.

This makes it the 14th largest commercial mortgage servicer, according to the MBA.

The group also reported a greater than $2 billion commercial mortgage lending volume for 2002 and manages over $11.2 billion in real estate-related assets for clients.

The MBA did not provide a ranking for John Hancock as a commercial mortgage originator-lender. But, based on 2002 rankings by MSN statisticians in theMortgage Industry Directory, at $2 billion a year John Hancock has volumes comparable to those of the 13th and 14th ranked commercial mortgage originators.

The merger is expected to create the largest life insurance company in Canada, and the second largest in North America, valued at $25.6 billion (Canadian $34.7 billion).

John Hancock shareholders are to receive 1.1853 Manulife common shares for each John Hancock common share, which translates into a price of $37.60 per John Hancock share. This represents a premium of 18.5% for the John Hancock shares, based on share prices as of Sept. 24, according to the companies.

"The combined companies' competitive strength will be marked by the diversity and depth of their products and distribution, a leading position in the marketplace across all of its core business lines and economies of scale," the companies said.

Manulife's Dominic D'Allessandro will be president and CEO of the combined company, which will have its headquarters in Toronto. And John Hancock's David D'Allessandro - who is not related to Manulife's Dominic D'Allessandro, the two companies stress - will become COO and president of Manulife and remain chairman and CEO of John Hancock, directing the combined companies' North American retail and group businesses, which will be headquartered here.

Most members of John Hancock's senior executive team are expected to remain with the company.

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