Chesnara To Buy HSBC Life UK From HSBC Bank In GBP 260 Mln Deal

(RTTNews) - Chesnara plc (CSN.L), a Life and Pensions Consolidator, announced Thursday that it has entered into an agreement to acquire HSBC Life (UK) Limited from HSBC Bank plc, affiliated to British banking major HSBC Holdings PLC (HSBA.L, HSBC), for a total consideration of 260 million pounds in cash.

Completion of the transaction is expected in early 2026, subject to customary regulatory approvals.

HSBC Life (UK) is a specialist life protection and investment bond provider in the UK with Eligible Own Funds of 314 million pounds as of December 31, 2024.

The company expects incremental lifetime cash generation from the deal in excess of 800 million pounds from HSBC Life (UK) with cash generation of over 140 million pounds during the first five years post-acquisition.

The company expects to fund the cash consideration through a combination of 55 million pounds of existing internal cash resources, and 65 million pounds drawdown from the Group's increased 150 million pounds revolving credit facility. Further, equity will be raised through a fully underwritten rights issue at 176p per share to raise gross proceeds of approximately 140 million pounds.

The transaction is anticipated to increase final FY25 and interim FY26 dividend by an adjusted 6%.

The acquisition represents Chesnara's largest transaction to date with around 4 billion pounds of assets under administration and around 454,000 policies being acquired. The combined Group will have approximately 18 billion pounds of total AuA and around 1.4 million policies.

Chesnara further expects the deal to result in its inclusion in the FTSE 250 index.

Steve Murray, Chief Executive Officer, Chesnara stated, "The proposed acquisition of HSBC Life (UK) represents a material step up in scale for Chesnara Group. HSBC Life (UK) is a high-quality business operating in products that we know well and is capable, under our ownership, of generating substantial cash flows for many years. This highly accretive transaction will allow us to build on our strong, 20-year track record of uninterrupted dividend growth."