Waterloo-based Sun Life Financial has a deal to sell its U.S. annuity unit and certain life insurance businesses for US$1.35 billion to Delaware Life Holdings.

The deal will affect Sun Life employees in Massachusetts, Alberta and Ireland who will join Delaware Life.

The deal is expected to close by mid-2013, subject to regulatory approvals.

“This transaction represents a transformational change for Sun Life. It significantly advances our strategy of reducing Sun Life’s risk profile and earnings volatility, focuses our U.S. operations on our areas of greatest strength and opportunity, and crystallizes future earnings and capital releases that will further support our growth and shareholder value creation. It also transfers this business to a financially strong buyer that understands and is committed to the annuity and life insurance sectors, which will benefit customers and the outstanding employees who will continue to support them.” Dean A. Connor, President and Chief Executive Officer, Sun Life Financial, stated in a news release.