Short Description: Chesnara acquires Scottish Widows Europe in a €110 million deal, promising €250 million in lifetime cash generation and strengthening its European consolidation strategy.
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Chesnara’s Strategic European Growth: A €250M Cash Flow Deal
UK-based life insurance consolidator Chesnara (LON:CSN) has announced a significant step in its European expansion strategy with the agreement to acquire Scottish Widows Europe from Lloyds Banking Group. The €110 million transaction, to be fully funded from cash resources, is strategically aimed at boosting the group’s long-term cash reserves.
The acquisition targets a closed life and pensions book managing around €1.7 billion in assets across 46,000 policies, primarily in Germany. Management projects the deal will deliver approximately €250 million in lifetime cash generation, with about €100 million emerging in the first five years alone. This infusion is expected to bolster Chesnara’s dividend progression, supporting a planned 6% increase at FY2025. Critically, the transaction is seen as materially value accretive, priced at just 64% of the target’s eligible own funds, and will leverage Chesnara’s proven expertise in managing similar legacy portfolios.
Financially, the deal reinforces Chesnara’s robust position. On a pro forma basis, the company’s solvency coverage ratio strengthens to 173%, comfortably above its 140-160% target operating range. The move into Luxembourg, a stable, AAA-rated jurisdiction, establishes a strategic foothold for further insurance consolidation in the fragmented Benelux and wider European markets. Subject to regulatory approval expected around year-end, this acquisition marks Chesnara’s second major deal in twelve months, clearly signaling its active pursuit of scaled growth through strategic M&A.
Short Summary: Chesnara’s acquisition of Scottish Widows Europe for €110 million is a strategic move to enhance cash flow and solidify its position as a European life insurance consolidator. The deal promises €250 million in lifetime cash generation, supports future dividend growth, and strengthens the group’s solvency, all while being funded from existing resources. It marks a key step in Chesnara’s expansion within the continental European insurance market.
