Preston-based life and pensions consolidator Chesnara plc said it agreed to acquire Scottish Widows Europe SA, a Luxembourg based closed life insurance business, from Scottish Widows Limited, a subsidiary of Lloyds Banking Group plc, for €110 million in cash.

Chesnara said highlights of the acquisition will include 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.

It said the deal adds €1.7 billion of assets under administration (AuA) and approximately 46,000 in-force policies.

Chesnara said said the acquisition give it entrance into Luxembourg, an additional attractive market, and the addition of new policyholders — based in Germany, Austria and Italy — providing “a platform for increased consolidation and scale across Europe.”

Chesnara CEO Steve Murray said: “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.”