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Goldman Sachs to Acquire Allmerica's Variable Life Insurance and Variable Annuity Business

NEW YORK, August 22, 2005 -- The Goldman Sachs Group, Inc. (NYSE: GS) today announced that it has agreed to acquire the variable life insurance and variable annuity business of Allmerica Financial Corporation (NYSE: AFC), including the wholly-owned life insurance subsidiary, Allmerica Financial Life Insurance and Annuity Company. The transaction is expected to close later this year, subject to the normal regulatory approvals.

In connection with the acquisition, Allmerica Investment Trust, a roughly $3 billion mutual fund complex owned by Allmerica, will be merged with Goldman Sachs Variable Insurance Trust, subject to regulatory and policyholder approvals.

Goldman Sachs is projected to pay in cash approximately $275 million upfront and an estimated $70 million over three years. The final purchase price will be determined at closing and is subject to adjustments to reflect changes in equity market levels, implied equity market volatility, interest rates, capital levels and the performance of the business through closing.

The variable life insurance and variable annuity business, which is no longer open to new policies, represents a total of approximately $11 billion in assets and some 200,000 policyholders. Goldman Sachs and Allmerica are committed to ensuring a smooth transition and continued high level of service for all policyholders.

"This transaction is a good example of our firm using its expertise to deliver a solution to a company with a non-core life insurance business," said Allan Levine, Managing Director and head of Goldman Sachs' Reinsurance business, adding "The addition of this acquisition to our existing reinsurance business will enhance our ability to help life insurance companies looking to manage risk and free up capital from their closed or inforce businesses."

Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.