Transaction advances Sun Life’s strategy of reducing its risk profile
and focusing U.S. insurance operations on its growing employee benefits
and voluntary benefits franchises

TORONTO, Dec. 17, 2012 /PRNewswire/ – Sun Life Financial Inc. (TSX: SLF) (NYSE:
SLF) today announced the execution of a definitive agreement whereby
Delaware Life Holdings, a company owned by shareholders of Guggenheim
Partners, will purchase Sun Life’s domestic U.S. annuity business and
certain life insurance businesses for a base purchase price of US$1.35
billion, as adjusted to reflect the performance of the business through
closing.

Employees of Sun Life Financial U.S. in Wellesley, Massachusetts;
Lethbridge, Alberta; and Waterford, Ireland will continue to support
the acquired businesses, which will be renamed Delaware Life Insurance
Company. Guggenheim Partners will provide services to the company
including investment management.

The transaction is expected to close by the end of Q2 2013 subject to
regulatory approvals and customary closing conditions.

Dean A. Connor, President and Chief Executive Officer, Sun Life
Financial, stated, “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.”

Connor added, “Consistent with our Four Pillar strategy unveiled in
March, we will continue to invest in both our U.S. employee benefits
business, which is already a top 10 player, and in our growing
voluntary benefits business. We have made excellent progress in growing
both of these businesses in 2012. We will also continue to support
growth in MFS, our highly successful investment manager that has a
large U.S. presence and over US$300 billion of assets under management
globally.”

Todd Boehly, speaking on behalf of Delaware Life Holdings,
added, “Together with Sun Life Financial’s employees, we look forward
to maintaining a high level of customer service, strong capitalization
and ratings, and to building on this impressive platform.”

Additional information

The transaction will consist primarily of the sale of 100% of the shares
of Sun Life Assurance Company of Canada (U.S.), which includes Sun Life
Financial’s domestic U.S. variable annuity, fixed annuity and fixed
index annuity products, corporate and bank-owned life insurance
products and variable life insurance products.

Sun Life Financial estimates that the transaction will result in a
reduction in book value of $950 million at closing. It is estimated
that the impact of the transaction on Sun Life Financial is
approximately ($0.22) per share of earnings in 2013, assuming actual
experience in line with actuarial best estimates. As a result of the
sale, Sun Life Financial’s earnings sensitivities to equity markets
would be reduced by 50% and earnings sensitivities to interest rates
would be reduced by 35%, relative to the published earnings
sensitivities as of September 30, 2012. The transaction is not expected
to result in any change to the Minimum Continuing Capital and Surplus
Requirements ratio for Sun Life Assurance Company of Canada, which
continues to have strong capital levels. At close, the transaction is
expected to result in a cash level at Sun Life Financial Inc. of $1.9
billion, net of the planned repayment of $350 million of debt in June
2013. Holders of the Medium Term Notes (MTNs) issued by Sun Life
Financial Global Funding III, L.P. will not be impacted by the sale of
Sun Life Assurance Company of Canada (U.S.).

Morgan Stanley & Co. LLC served as financial advisor to Sun Life
Financial. Debevoise & Plimpton LLP served as legal advisor to Sun Life
Financial.

The information contained in this document is in Canadian dollars unless
otherwise noted.

Sun Life Financial investor conference call

Sun Life Financial will hold an investor conference call to discuss this
announcement on Monday, December 17, 2012, at 8:30 a.m. ET. The
conference call will be hosted by Dean A. Connor, President and Chief
Executive Officer. The conference call will be available via live audio
webcast (http://www.media-server.com/m/p/v9o2fyu2) and by telephone. To access the conference call by telephone, dial
1-877-974-0445. Individuals participating in the call in a listen-only
mode are encouraged to connect via the webcast.

The investor conference call will be archived and made available until
January 17, 2013. To listen to a replay of the conference call, dial
416-640-1917 (Toronto) or 1-877-289-8525 and enter access code
4583286#. The archive of the audio webcast will also be available on
Sun Life Financial’s website at www.sunlife.com/PresentationsForInvestors.

Forward-looking information

In this section, “we”, “us”, “our” and the “Company” refers to Sun Life
Financial Inc. and its subsidiaries, joint ventures and associates.

Certain statements in this news release are forward-looking, including,
but are not limited to, (i) the anticipated timing of the closing of
the sale of our U.S. annuity business, (ii) the reduction in book value
as a result of the transaction, (iii) the expected reduction in our
exposure to the equity markets and interest rates and the expected
reduction in our earnings volatility, (iv) the estimated impact of the
business sold on our earnings in 2013, (v) the expected impact on the
Minimum Continuing Capital and Surplus Requirements ratio of Sun Life
Assurance Company of Canada, (vi) the expected cash level available to
Sun Life Financial Inc. at the close of the transaction and after the
planned repayment of debt in June 2013; and (vii) other statements that
are not historical or are predictive in nature or that depend upon or
refer to future events or conditions. Forward-looking statements may
include words such as “aim”, “anticipate”, “assumption”, “believe”,
“could”, “estimate”, “expect”, “goal”, “intend”, “may”, “objective”,
“outlook”, “plan”, “project”, “seek”, “should”, “initiatives”,
“strategy”, “strive”, “target”, “will” and similar expressions. All
such forward-looking statements are made pursuant to the “safe harbour
provisions” of applicable Canadian securities laws and of the United
States Private Securities Litigation Reform Act of 1995.

The forward-looking statements in this news release represent our
current expectations, estimates and projections regarding future events
and are not historical facts. These forward-looking statements are not
a guarantee of future performance and involve risks and uncertainties
and are based on key factors and assumptions, including without
limitation, the assumption that the transaction will be completed and
other assumptions set out in this news release, all of which are
difficult to predict. The forward-looking statements do not reflect the
potential impact of any non-recurring or other special items or of any
dispositions, mergers, acquisitions, other business combinations or
other transactions that may be announced or that may occur after
December 17, 2012. If any non-recurring or other special item or any
transaction should occur, the financial impact could be complex and the
effect on our operations or results would depend on the facts
particular to such item and we cannot describe the expected impact in a
meaningful way or in the same way we could present known risks
affecting our business.

The forward-looking statements contained in this news release describe
our expectations, estimates and projected future events as at December
17, 2012. Except as may be required by Canadian securities laws, we do
not undertake any obligation to update or revise any forward-looking
statements contained in this news release.

Forward-looking statements are presented for the purpose of assisting
investors and others in understanding our expected financial position
and results of operations as at the date of this news release, as well
as our objectives for the transaction, strategic priorities and
business outlook following the transaction, and in obtaining a better
understanding of our anticipated operating environment following the
transaction. Readers are cautioned that such forward-looking statements
may not be appropriate for other purposes and undue reliance should not
be placed on these forward-looking statements.

Actual results could differ materially from those expressed in or
implied by the forward-looking statements in this news release due to
various risk factors, including without limitation: (1) the ability of
the parties to complete the transaction; (2) failure of the parties to
obtain necessary consents and approvals as required under the
definitive agreement or to otherwise satisfy the conditions to the
completion of the transaction in a timely manner, or at all; (3)
failure to effectively or efficiently restructure and reorganize the
Company’s remaining businesses after the transaction has closed; and
(4) the impact of the announcement of the transaction and the
dedication of the Company’s resources to the completion of the
transaction and the effect of the transaction on our continuing
operations in the U.S. These risks all could have an impact on the
Company’s business relationships (including with future and prospective
employees, customers, distributors and partners) and could have a
material adverse effect on the current and future operations, financial
conditions and prospects of the Company.

Additional risk factors that could affect the purchase price adjustment
can be found in Sun Life Financial’s annual information form for the
year ended December 31, 2011 (our “AIF”) under the heading “Risk
Factors” and other regulatory filings filed or furnished to Canadian
and U.S. securities regulators available at www.sedar.com and www.sec.gov.

About Sun Life Financial

Sun Life Financial is a leading international financial services
organization providing a diverse range of protection and wealth
accumulation products and services to individuals and corporate
customers. Chartered in 1865, Sun Life Financial and its partners today
have operations in key markets worldwide, including Canada, the United
States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan,
Indonesia, India, China, Vietnam and Bermuda. As of September 30, 2012,
the Sun Life Financial group of companies had total AUM of $515
billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and
Philippine (PSE) stock exchanges under the ticker symbol SLF.

SOURCE Sun Life Financial Inc.