Chesnara (CSN) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition aligns with the strategy to consolidate life and pensions books, accelerate growth, and expand scale in the UK and Europe.

• Strengthens position as a leading life and pensions consolidator, supporting future M&A ambitions and eligibility for FTSE 250 inclusion.

• HSBC Life U.K. operates in familiar product areas, supporting integration confidence and enabling new business opportunities, particularly in open onshore bonds.

• Transaction adds approximately £4 billion in assets under administration and 454,000 policies, creating a combined group with £18 billion AuA and 1.4 million policies.

• Expected to accelerate dividend growth and support a step-up in the dividend trajectory.

Financial terms and conditions

• Total consideration is £260 million, funded by £55 million cash, £65 million RCF drawdown, and £140 million fully underwritten rights issue at 176p per share.

• Rights issue is on a 10-for-19 basis, at a 40% discount to the prior closing price, with all shareholders able to participate.

• Consideration represents 83% of HSBC Life U.K.'s eligible loan funds as of 31 Dec 2024.

• Non-refundable £20 million break fee payable if the acquisition agreement is terminated in most circumstances.

• If the acquisition does not complete, rights issue proceeds may be used for alternative acquisitions or returned to shareholders.

Synergies and expected cost savings

• Expense and capital synergies anticipated through operational efficiencies, migration to SS&C Technologies, and management actions.

• Additional value from future new business, capital management actions, and diversification benefits.

• Capital synergies expected post-Part VII transfer and through risk management actions.