SUN LIFE ANNOUNCES INTENTION TO SELL ITS UK BUSINESS

 Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) announced today it has entered into an agreement to sell SLF of Canada UK Limited ("Sun Life UK") to Phoenix Group Holdings plc ("Phoenix Group") (LSE: PHNX). Headquartered in London, Phoenix Group is the UK's largest long-term savings and retirement business with more than 13 million customers and £310 billion of assets under administration.

Sun Life UK manages life and pension policies and annuity blocks for UK Clients. The company is closed to new sales and has been operating as a run-off business in the life and pension policies segment since 2001.

Sun Life will sell Sun Life UK to Phoenix Group for a closing price of £248 million (approximately C$385 million) and will retain its economic interest in UK's payout annuities business. This transaction will also provide further growth opportunities for Sun Life's asset management businesses.

As part of the sale, Sun Life will form a long-term partnership to become a strategic asset management partner to Phoenix Group. Sun Life's asset management companies, MFS and SLC Management, will continue to manage approximately C$9 billion of Sun Life UK's general account upon the close of the sale.

Phoenix Group has set a goal to invest approximately US$25 billion in North American public and private fixed income and alternative investments over the next five years. MFS and SLC Management will be material partners to Phoenix Group in achieving this goal.

"We're excited to partner with Phoenix Group. A great deal of consideration was taken to find the right buyer and partner for our UK business. Phoenix Group is a purpose-led company with similar values to Sun Life and a strong focus on delivering outcomes for their customers. We're also pleased about our asset management partnership, which will bring the strength of MFS and SLC Management to Phoenix Group customers," said Kevin Strain, President and CEO of Sun Life. "Thank you to our UK team for all of their efforts in delivering solid results year-after-year in our life, pension and annuities businesses. We believe Phoenix Group will be a great organization for our UK employees and Clients."

"This acquisition is highly attractive for Phoenix Group.  As the UK's largest long-term savings and retirement business with a strong track record of UK closed book integrations, we look forward to offering a safe home for Sun Life UK Clients over the long term and enabling them to benefit from our broad range of Standard Life products in our Open division," said Andy Briggs, Phoenix Group, CEO. "I would like to take this opportunity to welcome the colleagues who will join us from Sun Life UK. We are also pleased to enter into a new, long-term strategic asset management partnership with MFS and SLC Management, Sun Life's Asset Management businesses. This partnership will complement our existing relationships and further enhance our liquid and illiquid credit capabilities in North America by building on their strong presence in the region."

Since 2016, Phoenix Group has successfully completed four acquisitions totaling approximately £7.5 billion. This has supported increasing their assets under administration by more than 300% over the past five years through organic and inorganic growth.

Strain added, "The sale of the Sun Life UK business is consistent with our strategy to grow fee-based and capital light businesses. It also frees up capital to continue on our journey of creating long-term value for our shareholders. This transaction also aligns with our objective to continue building our Sun Life asset management pillar by creating an attractive long-term partnership with the UK's leading long-term savings and retirement business."

This transaction is expected to close during the first half of 2023, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

Fenchurch Advisory Partners acted as a financial advisor to Sun Life for this transaction and Freshfields Bruckhaus Deringer LLP served as legal counsel.

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