UK life and pensions consolidator Chesnara has struck a deal with HSBC Bank to acquire its protection and investment bond arm HSBC Life UK for £260m.
HSBC Life UK has eligible own funds of £314m and the acquisition will increase Chesnara’s assets under administration by approximately £4bn and add 454,000 policies.
Chesnara has forecast an incremental lifetime cash generation of over £800m from HSBC Life UK with cash generation of over £140m during the first five years post-acquisition. Chesnara’s final dividend for the 2025 financial year and the 2026 interim dividend is expected to increase by 6% on an adjusted basis.
The deal is due to complete in early 2026, subject to regulatory approval, and could see Chesnara listed on the FTSE 250.
Chesnara’s CEO Steve Murray said: “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. We are continuing to see a strong M&A pipeline across our group which we are well-positioned to execute on.”
