Chesnara plc has reached an agreement to acquire HSBC Life (UK), a specialist in life protection and investment bonds, from HSBC Bank plc in a transaction valued at £260 million. The deal, which remains subject to regulatory approvals, is expected to close in early 2026.
The acquisition will be funded through a combination of £55 million in internal cash reserves, a £65 million drawdown from Chesnara’s amended £150 million revolving credit facility, and approximately £140 million in gross proceeds from a fully underwritten rights issue. The rights issue will be offered on a 10-for-19 basis at 176 pence per share.
Upon completion, the acquisition is expected to increase Chesnara’s assets under administration by around £4 billion and add approximately 454,000 policies to its UK portfolio. The company anticipates a 6% uplift in its adjusted final FY2025 and interim FY2026 dividends, underpinned by the strong cash flow profile of the acquired business.
With this transaction, Chesnara’s total assets under administration are projected to rise to approximately £18 billion, up from £14 billion at the end of 2024, according to Bloomberg.
The company also sees potential for further value creation through operational efficiencies, capital and cost synergies, management initiatives, and new business opportunities. Additionally, the increased scale may enhance Chesnara’s market profile and could support its potential inclusion in the FTSE 250 index.
HSBC’s decision to divest its UK life operations is part of a broader strategy to simplify its business and concentrate on core banking services, particularly in Asia where the group is allocating significant capital.
This acquisition continues Chesnara’s strategy of growth through consolidation. It follows the company’s December 2024 purchase of a closed book of business from Canada Life UK, which added approximately 17,000 policies and £1.5 billion in assets under management.
Chesnara CEO Steve Murray expressed confidence in the transition, stating that the company looks forward to integrating HSBC Life (UK) and working closely with HSBC Bank plc to ensure a seamless experience for policyholders and employees alike.
