Highlights:

  • Acquisition expected to generate approximately €250 million in lifetime cash, with around €100 million within the first five years.
  • Adds €1.7 billion in assets under administration and approximately 46,000 in-force policies.
  • Panmure Liberum sets a GBX 347.40 target price following the announcement.

 

Chesnara plc (LSE:CSN) has announced €110 million acquisition of Scottish Widows Europe SA. Following the update shares in Chesnara were trading at GBX 312.00, up 0.81% on the day and approximately 36.08% higher over the past year.

Alongside broker’s endorsement comes as the Group outlines how the transaction is expected to increase long-term cash flows and expand its European footprint.

Broker Endorsement Following Strategic Expansion

Panmure Liberum’s buy rating accompanies a target price that sits above the current market level of GBX 312.00. The rating follows confirmation that Chesnara will acquire 100% of Scottish Widows Europe from Scottish Widows Limited, a subsidiary of Lloyds Banking Group plc.

The transaction will be funded entirely from internal cash resources, including proceeds from Chesnara’s GBP 150 million RT1 bond issued in August 2025. Completion is expected around the end of 2026, subject to regulatory approvals.

How the Acquisition Benefits Chesnara

The Luxembourg-based portfolio is projected to deliver around €250 million in cash generation over the lifetime of its policies. Approximately €100 million is anticipated within the first five years, supporting near-term distributable cash flows.

The €110 million consideration represents 0.64x Scottish Widows Europe’s FY24 Eligible Solvency II Own Funds of €173 million, indicating pricing below the level of available capital. This structure allows Chesnara to secure additional assets under administration while maintaining financial flexibility.

Post-acquisition, the Group’s pro-forma Solvency II ratio is estimated at 173%, above its normal operating range of 140%–160%. The leverage ratio is expected to remain below its long-term target of 30%, preserving capacity for future transactions.

Expanding the European Consolidation Platform

The deal marks Chesnara’s entry into Luxembourg, a significant European life insurance market. The portfolio includes policyholders based in Germany, Austria and Italy, broadening the Group’s cross-border exposure.

Scottish Widows Europe operates with a largely outsourced model supported by Lifeware SA technology, enabling operational continuity under an experienced local management team. This provides Chesnara with an established platform for further consolidation opportunities across Europe.

The transaction follows the recent completion of the acquisition of HSBC Life (UK) Limited in January 2026, continuing the Group’s strategy of acquiring and integrating closed life and pensions books.

Chesnara’s €110 million acquisition of Scottish Widows Europe adds scale, expands geographic reach, and is expected to enhance long-term cash generation. Panmure Liberum has assigning a buy rating and a GBX 347.40 target price.

Frequently Asked Questions

Q1: What is the value of Chesnara’s acquisition of Scottish Widows Europe?
A: Chesnara is acquiring the business for €110 million in cash.

Q2: How will the acquisition benefit Chesnara financially?
A: The portfolio is expected to generate around €250 million in lifetime cash, including approximately €100 million within the first five years, while maintaining a pro-forma Solvency II ratio of 173%.

Q3: What is Panmure Liberum’s target price for Chesnara shares?
A: Panmure Liberum has issued a buy rating with a target price of GBX 347.40.