Manulife.

Breaking News of Manulife fiscal takeover of Boston- based insurer outhouse Hancock was big news last week. The 15 zillion dollar acquisition will vault the Canadian conjunction to the top ranks of the global indemnity industry. Market Capitalization that is trice to Royal Bank of Canada. For the bigger is always better crowd.

President Dominic D Alessandro attempt to merge with Canadian Imperial Bank of commerce, save got slide fastener but the silent treatment. Then Canadian bread and butter Financial outbid him. Dominic D Alessandro believes in the bigger is better philosophy. Meaning muckle and heft are everything in the banking and insurance business. Also in 2002 Mr. D Alessandro lost his spot as the largest insurer to Sun Life Financial when they bought Clarica.

Evidence shows that about 60 percent of large insurance mergers fail. If this is true than this could threaten investors who kick in been willing to pay for Manulife shares. In 2000, Manulife became a publicly traded company. There were debates regarding the merge of Manulife and John Hancock. For example, BMO renowned that John Hancock has fewer assets that are rated AAA by rating agencies (45% versus 80% for Manulife). The second example is several of their businesses have relatively low return on equity and as result are areas Manulife has tended to staying away from.

The insurers ROE is about 16 percent higher than some competitors. Manulifes high return was criticized by some analysis for its accounting. Using some of its actuarial militia it had put aside for the future investments losses was perfectly legal, but has made them a target. Fox-Pitt Kelton feels this merge will not meet in the long run, due to John Hancocks return or equity. Also stating that Sun Life is an example of what happens.

The acquisition of Manulife insurance...

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