Chesnara has agreed to buy HSBC’s protection and investment bond unit for £260m, which the life and pensions consolidator says is “a material step up in scale” for the business. 

Chesnara says the acquisition of HSBC Life will add around £4bn of assets under administration and approximately 454,000 policies. The unit also sells mortgage protection products.

It says the combined group will hold around £18bn of assets under administration and approximately 1.4 million policies.

The life and pensions consolidator, which operates in the UK and the Netherlands, will fund the sale through a mixture of cash and a £140m rights issue.

Chesnara says the sale will create operating efficiencies through the migration of the policy administration and new business opportunities by boosting its sale of open onshore bonds.

Chesnara chief executive Steve Murray adds: “The proposed acquisition of HSBC Life represents a material step up in scale for Chesnara Group.

“HSBC Life 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.”

The group says the deal is expected to complete in early 2026, subject to regulatory approval.