Manulife, RGA $5.4 billion reinsurance deal tops this week’s roundup

Deal: Manulife signs reinsurance agreement with RGA

Value: $5.4 billion

This week saw some of the most significant deals in Canadian history, including Manulife’s $5.4 billion reinsurance agreement with Reinsurance Group of America (RGA). Blakes, Goodmans, Torys, McCarthy Tétrault, and Bennett Jones are among the legal counsel in this week’s roundup.

Manulife signs $5.4 billion reinsurance agreement with RGA

Manulife Financial Corp. announced a $5.4-billion reinsurance agreement with Reinsurance Group of America (RGA), a global life and health reinsurance and financial solutions provider. The deal includes $2.4 billion of long-term care (LTC) reserve.

The latest deal follows two other big reinsurance deals for Manulife in the past year, including a $13-billion agreement in December 2023, and a $5.8-billion deal in March 2024.

“We are further unlocking significant shareholder value with a second milestone LTC reinsurance transaction within 12 months,” said Manulife President and CEO Roy Gori. “This transaction further demonstrates our ability to execute on complex transactions and collaborate with experienced counterparties to deliver win-win outcomes, including on both mature and younger LTC blocks.”

“We are excited to announce another mutually beneficial transaction with Manulife and are grateful for their continued trust in RGA,” said RGA Executive Vice President and Head of the Americas Ron Herrmann. “The acquired LTC block aligns well with our existing LTC portfolio, and both blocks will benefit from our diverse asset capabilities.”

The deal is expected to be completed in early 2025, subject to customary closing conditions.

CPP Investments signs second data center venture with Pacific AMC

The Canada Pension Plan Investment Board signed a new $1-billion joint venture deal with Pacific Asset Management Company (Pacific AMC) to develop data centers in South Korea. CPP Investments has committed $285 million to the joint venture’s initial seed project.

This marks the second collaboration between CPP Investments and Pacific AMC for a data center joint venture. The initial partnership was established in 2022 to work on the development of the Jukjeon Data Centre, situated in the eastern region of the Seoul metropolitan area.

CPP Investments made its initial direct investment in a data center in 2017 and has since created partnerships and investments in data centers in key locations throughout the Asia Pacific region, such as Australia, Hong Kong, Japan, Korea, Malaysia, and Singapore, as well as in the United States and Canada.

“The demand for data centres in Asia Pacific has been on the rise, driven by the continued need for cloud computing and the increasing global adoption of artificial intelligence,” said CPP Investments Global Head of Real Assets & Head of Europe Senior Managing Director Max Biagosch. “This new venture not only represents another milestone in our broader data centre strategy globally, but also expands a valued partnership with Pacific AMC, allowing us to seize additional opportunities in the sector to the benefit of CPP contributors and beneficiaries.”

Orla to acquire Musselwhite gold mine from Newmont for up to $1.2 billion

Vancouver-based Orla Mining Ltd. agreed to acquire the Musselwhite gold mine in Ontario from Newmont Corporation, an American gold mining company, for up to approximately $1.2 billion (US$850 million).

The transaction value consists of an upfront cash consideration of US$810 million and a gold-price-linked contingent consideration of US$40 million.

Blake, Cassels & Graydon LLP is serving as the legal counsel to Orla, with Stifel Canada and Scotiabank as financial advisors. Goodmans LLP is serving as the legal counsel to Newmont.

Torys LLP is serving as legal counsel to Orla’s shareholder Fairfax Financial Holdings Limited with a team that includes David Chaikof and Janan Paskaran.

“This acquisition is a significant milestone for Orla Mining. It more than doubles our annual production, while providing us with a presence in Ontario, Canada, one of the premier mining jurisdictions in the world,” said Orla President and CEO Jason Simpson. “We intend to not only continue to operate Musselwhite, but to seek optimization opportunities and to invest in its future, grow its reserves and resources, and extend its mine life. Thanks to our shareholders, notably Pierre Lassonde and Prem Watsa of Fairfax, and our banking and financial partners, for their continued support. We are also grateful to Newmont for their trust in our vision and commitment to sustainability.”

“We are pleased to be selling our Musselwhite operation to Orla and have full confidence that they will continue to operate responsibly, while maintaining strong partnerships with the mine’s workforce and local and Indigenous communities,” said Newmont President and CEO Tom Palmer. “The announced divestitures are expected to deliver up to $2.9 billion in gross proceeds to support Newmont's capital allocation priorities, which include strengthening our balance sheet and returning capital to shareholders.”

The deal is expected to close in early 2025, subject to customary closing conditions and regulatory approvals.

Sayona Mining, Piedmont Lithium to merge in $870 million deal

Australia’s Sayona Mining agreed to acquire US-based Piedmont Lithium in an all-stock merger valued at approximately $870 million (US$623 million). MergeCo, the resulting combined company, will streamline operations of their Quebec joint venture, North American Lithium (NAL), and strengthen their position in the North American EV sector.

McCarthy Tétrault, Herbert Smith Freehills, and Baker Botts are serving as legal counsel to Sayona, with Morgan Stanley as the exclusive financial advisor.

Bennett Jones, Gibson Dunn and Thomson Geer are serving as legal counsel to Piedmont, with J.P. Morgan as the exclusive financial advisor.

The deal includes AU$40 million and AU$69 million raised by Sayona, and US$27 million in shares issued by Piedmont. Shareholders of both companies will hold equal stakes in the merged entity.

Sayona CEO and Managing Director Lucas Dow said, “This merger marks a transformative step for Sayona and Piedmont, creating a leading North American lithium producer with the scale and capabilities to meet the growing demand for lithium products.”

“MergeCo will be North America’s largest lithium producer and will have an attractive growth profile with three DFS-stage development projects and an exciting near-term brownfield expansion opportunity at NAL,” said Piedmont President and CEO Keith Phillips. “The merger financing, corner-stoned by leading mining private equity group RCF, will enable us to weather the current industry downturn while making intelligent investments in our growth projects to be positioned for the recovery in lithium markets that we expect in the medium-term.”

The deal is expected to close in the first half of 2025, subject to customary closing conditions.