Deals: Chesnara Buys 100% of Scottish Widows Europe

The details on the Chesnara acquisition for you;

Chesnara plc (“Chesnara” or the “Company” and, together with its subsidiaries, the “Group”) is pleased to announce that it has entered into an agreement to acquire 100% of the issued share capital of Scottish Widows Europe SA (“Scottish Widows Europe”), a Luxembourg based closed life insurance business, from Scottish Widows Limited (“Scottish Widows”) (a subsidiary of Lloyds Banking Group plc (“Lloyds Banking Group”)) for total cash consideration of €110 million(1) (the “Acquisition”).

Acquisition Highlights

• Cash generation of ~€250 million over the lifetime of the policies held in the Scottish Widows Europe portfolio, with ~€100 million of this cash generation occurring in the first five years.

• Adds €1.7 billion of assets under administration (“AuA”) and approximately 46,000 inforce policies.

• €110 million(1) consideration fully financed with available cash, representing an attractive multiple of 0.64x FY24 Own Funds of Scottish Widows Europe of €173 million.

• Entrance into Luxembourg, an additional attractive market, and the addition of new policyholders (based in Germany, Austria and Italy) provides a platform for increased consolidation and scale across Europe.

• Pro-forma Group Solvency II ratio to remain robust and above normal operating range at 173%(2) and pro-forma leverage ratio expected to remain in line with investment grade rating.

• Completion of the Acquisition expected around end 2026, subject to customary regulatory approvals.

Commenting on the Acquisition, Chesnara CEO, Steve Murray stated:

“We are delighted to announce Chesnara’s second significant acquisition in the past twelve months. Scottish Widows Europe is another material and value-accretive transaction with a product set that we know well. It marks our entry into Luxembourg, providing a new platform for in-market and wider European consolidation and expansion. We are pleased that another major financial institution, Lloyds Banking Group, has chosen us to look after their policyholders. We look forward to welcoming Scottish Widows Europe policyholders and new colleagues to Chesnara.”