Hanover Insurance Group Inc. in Worcester, Mass., announced Friday that it had closed the sale of its runoff variable life insurance and variable annuity business to Goldman Sachs Group Inc.
Proceeds are expected to be about $347 million, Hanover said, based on an estimated purchase price calculated as of Nov. 30 and including a $40 million dividend from its retained life business, First Allmerica Financial Life Insurance Co., and $17 million additional cash available from certain noninsurance subsidiaries.
As previously announced, the board of directors has authorized share repurchases of up to $200 million funded from the sale's proceeds, and the buyback is expected to be substantially completed in the first half of 2006.
The sale was expected to produce a net after-tax loss of about $457 million in 2005.
Hanover was known as Allmerica Financial Corp. when guaranteed death benefits offered in the 1990s with its variable life insurance and annuity products became unaffordable liabilities during the bear market early this decade.
