8th Oct 2013 09:24
LONDON (Alliance News) - UK and Swedish life and pensions businesses owner, Chesnara PLC, Tuesday said that it has bought Direct Line Insurance Group's UK closed life insurance business, for a total consideration of GBP39.3 million.
The UK-based holding company Chesnara, said that it has acquired Direct Line Life Insurance Company Limited, off of Direct Line Insurance Group, and will finance the acquisition via existing cash resources and a new bank facility.
Direct Line Insurance Group said that the total sale proceeds of GBP62 million, include a pre-closing dividend of GBP23 million. It said that it expects a gain on disposal of approximately GBP12 million.
"We are very pleased to have reached agreement to acquire a complementary UK business which we can integrate with our existing UK life book. Adding this portfolio to our existing book of business brings extra security, from increased size and concentrated governance, to both existing and the newly acquired policyholders. It is of benefit to our shareholders as it fits with our strategy, is accretive to our embedded value and will also help support our dividend paying capacity in the medium term," said Chesnara Chief Executive Officer Graham Kettleborough in a statement.
Chesnara shares were up 0.5% Tuesday morning, trading at 272.96 pence per share.
Direct Line Insurance Group shares were also trading higher, up 0.8% at 208.70 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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